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44–527 CC


before the



OCTOBER 8, 1997

Serial No. 105–50

Printed for the use of the Committee on Government Reform and Oversight

DAN BURTON, Indiana, Chairman
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STEPHEN HORN, California
JOHN L. MICA, Florida
JOHN E. SUNUNU, New Hampshire
BOB BARR, Georgia

HENRY A. WAXMAN, California
TOM LANTOS, California
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ROBERT E. WISE, Jr., West Virginia
PAUL E. KANJORSKI, Pennsylvania
GARY A. CONDIT, California
CHAKA FATTAH, Pennsylvania
DANNY K. DAVIS, Illinois
JOHN F. TIERNEY, Massachusetts
HAROLD E. FORD, Jr., Tennessee
BERNARD SANDERS, Vermont (Independent)

KEVIN BINGER, Staff Director
PHIL SCHILIRO, Minority Staff Director

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    Hearing held on October 8, 1997

Letters, statements, etc., submitted for the record by:

Allen, Hon. Thomas H., a Representative in Congress from the State of Maine, prepared statement of

Barrett, Hon. Thomas M., a Representative in Congress from the State of Wisconsin, prepared statement of

Burton, Hon. Dan, a Representative in Congress from the State of Indiana:
Letter dated October 6, 1997
Prepared statement of

Condit, Hon. Gary A., a Representative in Congress from the State of California, prepared statement of

Cummings, Hon. Elijah E., a Representative in Congress from the State of Maryland, prepared statement of

Davis, Hon. Danny K., a Representative in Congress from the State of Illinois, prepared statement of

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Davis, Hon. Thomas M., a Representative in Congress from the State of Virginia, prepared statement of

Ford, Hon. Harold E., Jr., a Representative in Congress from the State of Tennessee, prepared statement of

Kanjorski, Hon. Paul E., a Representative in Congress from the State of Pennsylvania, prepared statement of

Lantos, Hon. Tom, a Representative in Congress from the State of California, Republican fundraising letters press packet

Mica, Hon. John L., a Representative in Congress from the State of Florida, information concerning committee expenses

Portman, Hon. Rob, a Representative in Congress from the State of Ohio, prepared statement of

Ros-Lehtinen, Hon. Ileana, a Representative in Congress from the State of Florida, lyrics to a song

Sanders, Hon. Bernard, a Representative in Congress from the State of Vermont, prepared statement of

Schiff, Hon. Steven, a Representative in Congress from the State of New Mexico, prepared statement of
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Sessions, Hon. Pete, a Representative in Congress from the State of Texas, prepared statement of

Shays, Hon. Christopher, a Representative in Congress from the State of Connecticut, prepared statement of

Towns, Hon. Edolphus, a Representative in Congress from the State of New York, prepared statement of

Turner, Hon. Jim, a Representative in Congress from the State of Texas, prepared statement of

Waxman, Hon. Henry A., a Representative in Congress from the State of California:
Letters exchanged regarding the investigation
Prepared statement of


House of Representatives,
Committee on Government Reform and Oversight,
Washington, DC.

    The committee met, pursuant to notice, at 11:10 a.m., in room 2154, Rayburn House Office Building, Hon. Dan Burton (chairman of the committee) presiding.

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    Present: Representatives Burton, Gilman, Hastert, Morella, Shays, Cox, Ros-Lehtinen, McHugh, Horn, Mica, Davis of Virginia, McIntosh, Souder, Shadegg, LaTourette, Sununu, Pappas, Snow-barger, Barr, Portman, Waxman, Lantos, Owens, Towns, Kanjorski, Condit, Sanders, Maloney, Barrett, Norton, Fattah, Cummings, Kucinich, Blagojevich, Davis of Illinois, Tierney, Turner, Allen, and Ford.

    Staff present: Kevin Binger, staff director; Richard Bennett, chief counsel; Dan Moll, deputy staff director; Judith McCoy; chief clerk; Teresa Austin, assistant clerk/calender clerk; Robin Butler, office manager; William Moschella, deputy counsel and parliamentarian; Will Dwyer, director of communications; Ashley Williams, deputy director of communications; Barbara Comstock, chief investigative counsel; Tim Griffin, Robert Rohrbaugh, Jim Wilson, and Uttam Dhillon, senior investigative counsels; Dave Bossie, oversight coordinator; Phil Larsen, investigative consultant; Kristi Remington, Alicemary Leach, Bill Hanka, and David Kass, investigative counsels; John Irving and Jason Foster, investigators; Carolyn Pritts, administrative investigative assistant; David Jones and John Mastranadi, investigative staff assistants; Phil Schiliro, minority staff director; Phil Barnett, minority chief counsel; Agnieszka Fryszman, Elizabeth Mundinger, Kristin Amerling, Andrew McLaughlin, and David Sadkin, minority counsels; Ellen Rayner, minority chief clerk; Jean Gosa, minority staff assistant; and Sheridan Pauker, minority research assistant.

    Mr. BURTON. The Committee on Government Reform and Oversight will come to order. Could we have the doors closed, please, and could everyone take their seats?

    Today, we are going to start our investigation with opening statements from both the majority and minority sides of the aisle. We will try to get through these in an expeditious manner. I would like for Members, if at all possible, to keep their statements to 5 minutes.
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    I hope to be one of the few who violates that rule, but as the chairman I will use my prerogative as chairman to go into a little bit more detail than others may be able to.

    As we begin these hearings, we are confronted with questions involving the basic integrity of our Democratic electoral process. We must address serious questions regarding the respect that this White House has for legitimate oversight and even the criminal justice system.

    Before we begin our opening statements today, I would like to comment on the recently released White House tapes. In the past few days, it has come to light that videotapes of White House coffees were hidden from this committee, the Senate and the Justice Department, despite numerous subpoenas which have been outstanding. Ours was outstanding for 7 months.

    Back in March of this year, we subpoenaed these records. We specifically asked for videotapes and audiotapes, unedited.

    Let's look at the language that's on the screen. When the White House failed to respond to our subpoenas, we were forced to move to contempt in May of this year. Only then did the President's men commit to a full production of the records. At that time, Mr. Ruff told me personally that the contempt citation we were moving was the impetus for them coming around.

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    On June 27, 1997, the President's counsel, Mr. Ruff, officially certified that the White House, and this is right out of his letter, ''produced all documents responsive to the committee subpoenas;'' all documents responsive to the committee's subpoenas.

    Of course, that was not the case. It is now apparent that even when the Senate learned of these tapes, the White House continued to provide misinformation on their very existence. As the Washington Post observed yesterday, quote, the attitude of this White House toward the truth, whenever it is in trouble, is the same: Don't tell it or tell only as much as you absolutely must, or as helps, end quote.

    Now, the President says he will cooperate. Yet our request on Monday for the complete logs of all videotaped or audiotaped events at the White House by close of business Tuesday was not complied with. They continue to run the clock and divert attention to other matters.

    In addition to that, we have now been informed there may be some fund-raising tapes, up to 150, that we don't have. And so when the President says they have complied, all we have to do is look at the tapes. Well, we would like to have all the tapes unedited in their entirety. And we do not yet have them.

    This is not good faith compliance. We intend to fully examine this.

    I would also like to enter for the record my October 6, 1997 letter to the White House relating to these matters. Without objection, that will be so entered.

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    [The letter referred to follows:]


    Mr. BURTON. Now to our investigation, there are almost daily revelations about troubling actions taken by senior White House and Democratic National Committee officials in the frenzy to fill the campaign coffers. The American people have a right to know what went wrong. There were millions of dollars in campaign contributions that have been returned because of illegal or highly suspicious sources.

    As the chief oversight committee in Congress, the Committee on Government Reform and Oversight serves this role in informing the American people about how laws designed to govern our free elections may have been thwarted.

    We are committed to thorough and fair hearings on the role of foreign money in recent campaigns. While the excesses of the White House and the Democratic National Committee may have propelled this investigation, the committee also is examining matters relating to the Republican National Committee and will continue to follow the facts wherever they lead us, in either party.

    We are here today because we are compelled, by credible allegations of wrongdoing and by our public responsibility, to conduct oversight of these matters. Numerous individuals have pled guilty to criminal charges relating to campaign fund-raising. In the course of our investigation, we have found credible evidence of illegal foreign money funneled and conduit payments made to the Democratic National Committee.
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    The committee has amassed considerable evidence relating to the activities of former senior DNC official and Clinton appointee John Huang, and former Clinton appointee Charlie Trie. We are, however, at the very beginning of this investigation. I have no allusions that our task will be an easy or a quick one. This is going to take some time.

    This committee's hearings will cover many subjects, because the reported abuses of campaign laws and misuse of Government resources are vast. Our initial focus has been on how political parties took or raised contributions from foreign sources. I am gravely concerned about foreign governments, foreign companies or foreign nationals trying to influence our electoral process and also our foreign policy.

    Of equal concern, however, is the possibility that the United States is perceived by other countries as so corrupt that they would believe that they could tamper with our democratic process to further their own agenda. At the end of the day, the individuals who are involved must be held accountable.

    It was not, ''the system,'' which solicited millions of dollars in illegal contributions. The system did not rent out the Lincoln bedroom. The system didn't withhold subpoenaed records. The system is not responsible for individuals ignoring the campaign finance laws that we already have. It is individuals who are responsible for these actions. It is individuals who must be held accountable. The administration and others are using, ''the system,'' as an excuse to change the subject. We are talking about existing laws being broken here.

    Although the Clinton White House is extremely adept at spin control and damage control, it claims to be hopelessly incompetent when it comes to locating records subpoenaed by this committee, the Senate committee, or its own Justice Department. As the Washington Post asked yesterday, quote, Can anyone believe this is on the up and up? end quote. You simply could not make up some of the more outlandish actions taken by this, ''anything goes White House.''
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    Last February, this committee received documents from Harold Ickes. We were stunned to see the President's own handwriting—he said he didn't know anything about this initially—but his own handwriting ordering, quote, ready to start overnights right away. Give me the top 10 list back along with $100,000 to $50,000, end quote.

    He didn't know anything about it and yet his handwriting proved otherwise. In this atmosphere, is it any surprise to find Chinese arms dealers, drug dealers, leaders and fugitives from justice attending DNC events at the White House with the President? The tone was set at the top. And as Harry Truman said, the buck should stop there.

    We have learned that the chairman of the Democratic National Committee contacted a man named Bob at the CIA on behalf of a DNC donor. The National Security Council was overruled on providing access to DNC donors who had been described as hustlers. Millions of dollars in conduit payments were made to the DNC. We are told, it was simply a mistake; everybody does it; or the system is to blame. These are the words of people looking to shift the responsibility and the blame.

    All Americans should understand that these campaign finance scandals are unprecedented in many ways and international in scope. Over 60 people have taken the fifth amendment or fled the country. These people are now unavailable to aid in our efforts to get at the truth and let America know what the truth is—American people know what the truth is.

    Many of these individuals are close friends of the President. Let's take a look at some of the President's close friends and associates who refuse to cooperate with this investigation.
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    First, we have John Huang, who has taken the fifth amendment. Mr. Huang has been a friend of the President's since the 1980's. He visited the White House over 90 times, between 1993 and 1996. At a July 22, 1996 fund-raiser, the President praised, quote, his long-time good friend, John Huang, end quote, who raised over $3 million for the DNC.

    Before coming to Washington in 1994, Mr. Huang worked for the Riady-owned Lippo Group. We find the Lippo Group and the Riadys throughout this whole mess.

    He raised funds for the President and the DNC during the 1992 election. After President Clinton took office, Mr. Huang requested a political appointment in the Clinton administration. After Mr. Huang and James Riady met with the President, Mr. Huang finally received his appointment to the Department of Commerce in July 1994.

    At the same time that the Clinton administration hired Mr. Huang, and I hope everybody gets this, the Riady family hired Webb Hubbell and paid him $100,000 for no apparent work. After Mr. Huang worked at the Commerce Department for a little over a year, there was a concerted effort to move him over to the Democratic National Committee.

    Associates of the Riady family contacted numerous DNC and administration officials on John Huang's behalf. Mr. Huang and Mr. Riady met with the President in September 1995 to request that Mr. Huang move to the DNC. According to Bruce Lindsey, Mr. Huang felt that he, quote, could be most helpful to the President, end quote, at the DNC.

    More than half of the over $3 million he raised at the DNC was pledged to be returned because the contributions were illegal or highly questionable.
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    Next, we have Charlie Trie who has fled the country. Like John Huang, Charlie Trie also knew the President for years in Arkansas and visited the White House on dozens of occasions. DNC documents from the summer of 1994 list Trie as an FOB, friend of Bill. His $100,000 contribution during the summer of 1994 gave him a seat at the President's head table during the Presidential gala; for a $100,000 contribution.

    These contributions came just days after he received a $100,000 wire from the Lippo Bank. And Mr. Trie, to the best of our knowledge, never made a lot of money and certainly couldn't afford a $100,000 contribution. He was of moderate income.

    Next, we have the Riady family, who controls the Lippo Group, which employed John Huang. The Riadys supported President Clinton in Arkansas throughout the 1980's, made large contributions to the DNC and State parties in the closing months of the 1992 campaign, and as I mentioned earlier, paid Webb Hubbell $100,000. The Riadys are not in the country and refuse to make themselves investigable to this committee or other investigators.

    Just last September, however, James Riady was available to attend intimate meetings with the President. And it won't surprise anyone that Webb Hubbell has also taken the fifth amendment and refused to cooperate with this committee.

    Hubbell was one of the President's best friends from Arkansas. President Clinton appointed him to the No. 3 position at the Justice Department. In early 1994, Hubbell found himself in the middle of the Whitewater scandal. Because of his legal problems, Hubbell resigned his top Justice Department job in the spring of 1994. By the end of the year, while under criminal investigation, Hubbell, with apparent ease, earned over half a million dollars, at least a half million dollars, in consulting fees for doing little, if no, work.
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    Administration officials and Clinton friends found this work for Hubbell because even as Mack McLarty candidly acknowledged in notes he took, quote, law firms were reluctant to touch him, end quote, meaning Webb Hubbell.

    At what was reportedly a critical juncture in the Whitewater investigation in June 1994, Mr. Hubbell received the $100,000 payment from a Lippo affiliate. This payment followed numerous meetings of the Riadys and John Huang at the White House in June 1994.

    Former special assistant to the President and 1992 Clinton fund-raiser, Mark Middleton, has also taken the fifth amendment. Mr. Middleton met on dozens of occasions with James Riady, John Huang, Charlie Trie and Charlie Trie's business partner, Ng Lap Seng while he worked for the White House Chief of Staff, Mack McLarty. When Mr. Middleton left the White House in February 1995, he turned his White House access and ties to these individuals into Asian business deals. Mr. Middleton also remained active in the 1996 campaign and directed donors to the DNC and the White House coffees.

    Mark Jimenez, a former client of Mark Middleton, is the most recent witness to invoke the fifth amendment before this committee.

    Next, we have Johnny Chung, the infamous hustler, who gave $366,000 to the DNC, has taken the fifth. It was Mr. Chung who said, in July of this year, quote, I see the White House is like a subway. You have to put in coins to open the gates, end quote.

    Mr. Chung should know. He made 55 trips to the White House and was a frequent guest in the First Lady's office. Mr. Chung was able to bring a delegation of Chinese businessmen into the White House for lunch at the White House Mess, among other perks. In exchange, he was expected to give money.
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    One call sheet, prepared for DNC Chairman Don Fowler read, quote, Johnny committed to contribute $75,000 to the DNC reception in Los Angeles on September 21st. He has still not sent his contribution. Tell him if he does not complete his commitment ASAP, bad things will happen. That's a threat, end quote.

    Lack of cooperation by so many people should not be rewarded with a lack of attention, but rather with a commitment or a more vigilant investigation.

    How is it that so many highly placed friends of the President have ended up taking the fifth or fleeing the country? Sixty-one people have refused to cooperate with either our committee or the Senate committee's investigation. We will not allow these obstacles to defeat our obligations to the American people. They have a right to know.

    Although people may be impatient for hearings, what this committee is doing is slow, painstaking work. We will hold hearings when we are satisfied that we can present important pieces of this puzzle to the American people and not before.

    The President and the Vice President should assist by reaching out to these 60-plus witnesses, many of whom are close friends, and ask for their help to get to the truth.

    Mr. President, Tom Brokaw contacted Charlie Trie. Why not you? He is a friend of yours.

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    Mr. President, aren't you curious as to how Charlie Trie was able to contribute hundreds of thousands of dollars to the DNC when he did not have a successful business venture? Where did you think he got all of that money that he gave to the DNC that made him a managing trustee? The people have a right to know.

    Mr. President, your long-time friend, John Huang, is reportedly sitting at home these days. Why don't you ask him to come forward and explain his fund-raising practices and where the money came from? The people have a right to know.

    Mr. President, your former Associate Attorney General and close friend and golfing partner, Webb Hubbell, refuses to discuss his $100,000 payment from the Riadys, a payment which came shortly after numerous visits to the White House by the Riadys and John Huang were made. Don't you think the American people deserve an explanation? The people have a right to know.

    Mr. President, do you condone this wall of silence erected by your friends? If not, Mr. President, tear down that wall.

    We have heard much about campaign finance reform in the past few weeks. Mr. President, if you want to be a leader in campaign finance reform, then lead by example. Help us find out who broke the current laws that are already on the books. The laws that were broken were not hazy or fuzzy. They are straightforward laws such as it is illegal to funnel foreign money into campaigns and it is illegal to use conduits to funnel money into campaigns. Will you help us, Mr. President? Or will we have to wait for a Justice Department that reads the Washington Post for its next investigative lead?

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    In our constitutional system of checks and balances, Congress serves as an independent reviewer of the facts. Among the several tools available to us is the granting of immunity to individuals with important information for our investigation. Tomorrow, we will hear the testimony of three witnesses who have been immunized by this committee, the sister of Charlie Trie, Manlin Foung, her friend, Joseph Landon, and a Los Angeles businessman, David Wang.

    In addition, the committee also has received a proffer from two key witnesses. In May of this year, Nora and Gene Lum pled guilty to felony conspiracy to violate Federal campaign laws. As a part of the Lums' plea agreement with the Justice Department, they were granted immunity by the Justice Department from further prosecution under the Federal election statutes. The attorneys for Nora and Gene Lum have provided a written proffer to the committee, which outlines the areas about which they will provide testimony.

    The proffer indicates that the Lums will testify on a number of significant matters currently under investigation by this committee. The committee consideration of the Lums' proffer has been under way for several months by staff on both sides of the aisle.

    Representatives of the minority were present at a July meeting when the proffer was first made by the Lums' attorneys. Further, they accompanied the majority staff at a meeting to discuss the matter with the Justice Department officials.

    The Justice Department initially indicated they did not agree with the committee's suggestion to grant immunity to these witnesses, even though they have already themselves granted these people immunity.

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    On July 23, 1997, I sent a letter to Attorney General Reno requesting an explanation of their position. To date, I have not received any response from the Attorney General, and it has been 3 months. Sounds like they are pretty busy over there.

    Today, with the permission of the Lums' attorneys, I am making this proffer available to the committee members and the public. I plan to schedule a committee business meeting to consider immunity for the Lums before the end of this month. The Lums' proffer and the investigative work that has been done by the committee staff indicates that the solicitation and utilization of foreign money and conduit payments did not begin after the Republicans won control of the Congress in 1994. Rather, it appears that the seeds of today's scandals may have been planted as early as 1991.

    In conclusion, I would like to note there is a growing concern that there was real corruption in the financing of campaigns in this country and that this corruption may have affected our foreign policy and possibly our national security.

    The American people have a right to know whether any national interests were put in jeopardy by these activities. Let's get the facts out.

    As Abraham Lincoln said, ''Let the people know the facts and the country will be saved.''

    I ask unanimous consent that all exhibits be made a part of the record and without objection, that will be done.

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    Mr. KANJORSKI. Objection.

    Mr. BURTON. You do object?

    Mr. KANJORSKI. Mr. Chairman, I do object. I want to call the Chair's attention to the fact that the Chair just violated the Rules of the House, as I understand them. If the Chair will refer to Rule 11, clause 2(k)7, it is stated there that no evidence or testimony taken in executive session may be released or used in public sessions without the consent of this committee.

    As I understand it, there has been no vote in this committee to release any of the facts or testimony contained in depositions previously taken, and the Chair has exhibited on the screen exhibit C–6 with a statement taken from the deposition of David Mercer.

    Mr. BURTON. Give me just a second to check with my legal counsel, would you please?

    Mr. KANJORSKI. Certainly.


    Mr. BURTON. The gentleman is correct. One exhibit in the information we want to submit for the record should not have been divulged at this time, but all of the other exhibits will be made a part of the record, with the exception of the one the gentleman referred to.
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    Mr. KANJORSKI. Further reserving the right to object, Mr. Chairman, and certainly not intending to object to any of the exhibits the chairman has offered, and quite frankly, calling the chairman's attention to the fact, it was the minority side of this committee that fought to disclose all of these depositions so that this information could properly be brought before the public. I reiterate that the chairman should reconsider his position in denying the press, the American public, and the minority of this committee the use of those depositions at this hearing so that we can properly bring out all the facts and information that are relevant to this hearing.

    Mr. BURTON. That is a matter that has been under discussion and we will consider to review that.

    Mr. MICA. Regular order.

    Mr. KANJORSKI. No further objection.

    Mr. MICA. Regular order.

    Mr. BURTON. Do I hear an objection?

    Mr. KANJORSKI. No objection.

    Mr. BURTON. No objection. So the information will be submitted for the record, with the exception of the document that was referred to.
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    [The prepared statement of Hon. Dan Burton, and the information referred to follow:]


    Mr. BURTON. We will now hear from Mr. Waxman, the ranking minority member.

    Mr. WAXMAN. Mr. Chairman, months ago the Democrats on this committee, led by Congressman Gary Condit, asked that we get copies of the depositions taken by the Senate. We debated the issue in committee, wrote to Senators Thompson and Glenn with the request and we raised the issue several more times with your staff. So I was skeptical when I received a tip 2 weeks ago that, in fact, you had copies of many of those depositions, and I was disappointed to learn last week that it was true that you did have copies of the Senate depositions, but had not shared them with us.

    You explained this mistake by pointing to staff and administrative error. That has also been the explanation for at least five other instances when the minority received misinformation or didn't receive documents. It is also the explanation given 2 seconds ago when it was pointed out that a deposition taken in executive session was leaked right here at this hearing, even though it is against the rules of the Congress to release depositions without a vote of the committee. In fact, when the Democrats asked that all the depositions be made public, the Republicans argued against it, saying that they didn't think it was appropriate. It seems like the majority's view is, release is appropriate on a selective basis if it serves a particular purpose.
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    Now, the explanation for that is simply another bungle, another error, another mistake, somebody else was responsible, probably the staff. Now, I have accepted your explanations, but I still find this conduct inexcusable.

    In the same way, I can understand the White House's explanation for the coffee tape fiasco, but I still find it inexcusable. This seems to happen so often with the White House, that I wondered whether it is nefarious conduct, as the chairman has concluded, or just a lack of competence. I believe Charles Ruff, the President's Counsel, would not intentionally mislead Congress. And since in many cases it is the failure to provide the information when first requested and not the substance of the information that is damaging, ineptness seems to be a more logical explanation.

    At this point, this seems to me to be the case with the coffee videos. But it is still inexcusable. When you go beyond that, as you did this morning, Mr. Chairman, then it becomes clear that partisanship, again, is the dominant theme in our committee. And no investigation can be credible so long as it is motivated by partisanship.

    Our committee has, of course, a fundamental obligation to investigate serious abuses of our Nation's campaign finance laws without regard to the political consequences, whether they be to the Democrats or Republicans. Every Democrat on this committee has supported such an effort. In fact, on March 6th, all 20 minority members signed a letter to Speaker Gingrich supporting an aggressive and comprehensive investigation into all alleged campaign finance abuses.

    We did, however, offer a suggestion: Instead of authorizing two identical and duplicative efforts, the House and Senate resources should be consolidated into one thorough and bipartisan investigation.
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    We continue to believe our proposal would have saved money and been more effective at uncovering the truth about what really happened last year.

    Well, neither Speaker Gingrich nor any of the Republican members of this committee ever responded to that letter. Instead, the House and Senate committees have investigated the same issues, deposed the same witnesses and subpoenaed the same documents with no coordination between us.

    Everything that the chairman outlined in his opening statement this morning for around 15 minutes, we didn't need to spend a single dime on to investigate because it was all reported by the press or the Senate.

    Senator Thompson has now chaired 26 days of hearings and he, Senator Glenn and their colleagues have provided a valuable service. The Senate hearings may not have captured the public's attention, but they have uncovered disturbing conduct and exposed some of our campaign system's most glaring deficiencies.

    In contrast, our committee's work has been beset by a series of problems and raw partisanship. I won't recite the litany, but our low point probably came in July when the Republican chief counsel resigned because he said he had not been given the authority to, quote, implement the standards of professional conduct, end quote, necessary to do his work.

    In addition, Mr. Rowley noted that he wanted to, quote, follow where the evidence leads, end quote, while others wanted to use the investigation simply to, quote, slime, end quote, the Democrats. After Mr. Rowley left, the committee's Republican staff was without a chief counsel for nearly 2 months.
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    Perhaps the best measure of partisanship is that of the 554 subpoenas and requests for information Chairman Burton has issued, 544 have been directed at Democratic targets. Only 10 have sought information for Republican fund-raising abuses. Given those numbers, it is no surprise that Chairman Burton once reportedly predicted that his investigation would ensure Republican control of the House in 1998.

    Now, given Senator Thompson's work, we face a real question of purpose. We have already spent almost $3 million without holding a single hearing. Before we invest millions more, we should have a clear understanding of what we are doing and how it relates to what Senator Thompson and Independent Counsel Kenneth Starr have already investigated.

    Well, we won't find that understanding today. Instead, we are likely to hear a quotable series of partisan but unsubstantiated accusations.

    Keep in mind, as they are presented, that Chairman Burton and his colleagues have refused to release the 52 depositions the committee has taken, except in the one instance where they released it improperly today, at least a portion of one deposition.

    Those depositions comprise nearly all of the committee's investigative work, and the reason those depositions remain secret is they offer no support for the accusations you will hear.

    One final point. I began my comments by recognizing the serious responsibility we have to investigate, but we also have an equally serious responsibility to legislate when reform is needed, and our campaign finance system is in desperate need of reform.
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    Several of our colleagues on this committee, including Representative Tom Allen from Maine, Representative John Tierney from Massachusetts, and Representative Chris Shays from Connecticut have sponsored bills that would improve the system. I have cosponsored their legislation and hope my colleagues won't be content just to investigate last year's problems. Our system is broken and our job is to fix it.

    Mr. Chairman, I look forward to tomorrow's hearing and working with you, as best we can, and I want to, at the conclusion of this statement, put into the record the letters we have exchanged about our committee's investigation and the letters to Speaker Gingrich to be included in the record following my statement.

    Mr. BURTON. Without objection.

    [The prepared statement of Hon. Henry A. Waxman and the information referred to follow:]

    INSERT OFFSET FOLIOS 36 TO 37, 44 TO 308, AND 38 TO 43 HERE

    Mr. WAXMAN. I yield back the balance of my time.

    Mr. BURTON. The gentleman yields back the balance of his time.

    I ask unanimous consent that all Members' written statements be included in the record.
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    Without objection, so ordered.

    [The prepared statements of Hon. Christopher Shays, Hon. Stephen Schiff, Hon. Thomas M. Davis, Hon. Rob Portman, and Hon. Thomas H. Allen follow:]


    Mr. BURTON. The next person to speak will be the vice chairman of the committee, Mr. Chris Cox of California.

    Mr. COX. I thank you, Mr. Chairman.

    We are here today because it is our responsibility. The very first sentence of our Constitution states that it is the purpose of the Federal Government to establish justice. But today, as we meet here in Washington, DC, at the highest levels of our Government, there is no justice. It is fair to say that a single newspaper, the Los Angeles Times, has uncovered more evidence about the many Clinton scandals than has the Department of Justice.

    Today, there is no question that John Huang and Charlie Trie laundered foreign money for Bill Clinton, the President of the United States. But there is no indictment. The Attorney General, according to sources quoted in the Washington Post, obstructed the FBI from interviewing and investigating high officials of the Clinton administration.

    The Washington Post put it plainly yesterday in an editorial. Quote, ''The attitude of this White House toward the truth, whenever it is in trouble, is the same: Don't tell it, or tell only as much as you absolutely must, or as much as helps.''
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    Continuing to quote from the Washington Post, ''their first reaction,'' referring to the White House, ''their first reaction to the name John Huang was to suggest they had never heard of him. That was before it turned out he had visited the White House 78 times in 15 months. Call it stonewalling. Can anyone really believe they don't know the answer? Can anyone believe this is on the up and up?'' That is what the Washington Post had to say yesterday.

    The New York Times was just as blunt. Yesterday's headline described the Justice Department meltdown. Quote, ''It has been a full year since Miss Reno was confronted with initial evidence,'' wrote the New York Times, ''of the biggest political money scandal in a generation. Her response shows little concern with her place in history as a custodian of the Justice Department.'' New York Times, Tuesday, October 7, column one editorial.

    If the Congress does not commence this investigation, there will be no justice. Janet Reno will not investigate Bill Clinton or Al Gore. She cannot absolve them. She has shown that Justice has a hopeless conflict of interest. She, herself, is part of the President's Cabinet.

    Her letter to this Congress of last Friday states that she has no evidence that fund-raising events took place in the White House and on that ground refuses to appoint an Independent Counsel to begin an investigation.

    One thing is clear. Neither Janet Reno nor Justice has conducted an arm's length investigation. When the Attorney General issued her letter on Friday, she claimed to make her decision on the basis of, ''all of the information known to me as a result of the Department of Justice's ongoing investigation into campaign finance allegations.'' But there is no such investigation, not a real one, not a credible one. Two days before her letter was issued, the Counsel to the President, Charles Ruff, knew of the existence of the videotapes of the White House fund-raising coffees. Mr. Ruff wrote this in a letter to the chairman of this committee. He knew it on Wednesday. He met with the Attorney General on Thursday and he did not tell her.
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    He did not tell her and she did not ask. Don't ask, don't tell, describes not only the Clinton policy on gays in the military, but the Clinton policy on White House tapes.

    The next day, the Attorney General issued her letter absolving the President of fund-raising in the White House and at White House coffees on the basis of evidence discovered in the investigation even though that investigation had actually sought those videotapes, but not discovered them.

    Mr. Ruff's conduct in meeting with the Attorney General, knowing of this evidence and not telling her when he knew Justice was after it, is obstruction and cover-up, pure and simple.

    The chief White House propagandist, Lanny Davis, told reporters, it is up to you to declare us incompetent. But that's not our job. It is up to us to see that justice is done.

    The Justice Department has no conflict of interest investigating Congress. Since 1970, over 60 Members of Congress, both Republican and Democrat, have been indicted and charged with crimes. But this White House and Justice Department cannot be trusted to investigate themselves. Despite the national outcry, they have steadfastly refused to appoint an Independent Counsel.

    The Senate investigation has a deadline which is soon expiring. It is up to us. The Congress must do all we can to ensure that suspected criminals are charged with crimes, that the guilty are punished, that justice is done and that America and our Constitution are secure.
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    I thank the chairman for convening these hearings and I yield back.

    Mr. BURTON. I thank the gentleman from California.

    The next person to be recognized is Mr. Lantos.

    Mr. LANTOS. Thank you, Mr. Chairman. I would prefer to make my statement after we cast our votes, if I may.

    Mr. BURTON. Well, we have 15 minutes before this vote will be concluded. I would like to move along until we get close to the vote, if it is possible.

    Is there someone else on your side?

    Mr. LANTOS. I am prepared to begin my statement. I merely suggest I will not conclude it by the time we need to leave.

    Mr. BARR. You only have 5 minutes.

    Mr. LANTOS. I am delighted to begin. If that is your privilege—pleasure, I will do so.

    Mr. BURTON. Well, aside from the chairman and the ranking minority member, we wanted to try to confine our statements to 5 minutes or as close to that as possible, Mr. Lantos.
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    Mr. LANTOS. I shall proceed, Mr. Chairman.

    Mr. BURTON. Mr. Lantos.

    Mr. LANTOS. Mr. Chairman, it is very hard to tell whether this hearing has the quality of Alice in Wonderland or the theater of the absurd. It probably has the quality of both.

    There is an attempt on the part of Members on the other side to portray the fund-raising difficulties that this country confronts as a battle between the forces of good and the forces of evil.

    I find it difficult to believe, and I suspect the American people find it difficult to believe, that $558 million was raised by Republicans and $336 million by Democrats, all of the Republican funds raised with virginal purity while the Democratic fund-raising was deeply flawed.

    I would like to direct your attention and the attention of my other colleagues to today's Wall Street Journal, page A–10. There is a small article which reads as follows: ''Firm is fined $8 million in campaign finance case.'' And the article says, as follows: ''A Pennsylvania landfill operation has agreed to pay an $8 million fine for campaign finance violations that a prosecutor said involved illegally funneling donations to the campaigns of President Clinton, former Senator Bob Dole and various congressional candidates.''

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    The article goes on to say the charges stem from an allegedly illegal scheme in which campaign donations were funneled through conduits, a spokesman for the company said. Donations to the Presidential campaigns of Messrs. Dole and Clinton by company employees and associates of seemingly limited means were the subject of an article in the Wall Street Journal in April 1996, and so on.

    This little item, which, of course, is not surprising, although it said, more accurately portrays what, in fact, is happening in the field of campaign finance than all the violently and vitriolically partisan statements of yourself and others.

    It is a fact that our campaign finance system is broke. It is broke because it is unenforceable and because both Republicans and Democrats have violated a tremendous range of campaign finance regulations. And this pose, which is so unseemingly and so unbelievable and so unattractive and so incredible, that somehow all of the flaws and mistakes were committed on the Democratic side while this virginal purity on the Republican side allows my colleagues with a degree of hypocrisy that boggles the mind to claim outrage at all of these things that happened.

    Yesterday, in connection with the coffee tapes, Senator Thompson made the observation that incompetence is wearing thin as a defense. Well, let me comment about incompetence, if I may.

    I received in my congressional office an official invitation on September 17th from the Republican leadership of the U.S. Senate cordially inviting me to serve as a Member of the Republican Senatorial inner circle and outlining, in excruciating detail, the incredible opportunities I will have of dining, wining, rubbing elbows with, conferring and giving advice to the leadership—the Republican leadership of the U.S. Senate if I only send in my inner circle membership.
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    A member of my staff a bit earlier received another invitation, this time from the Presidential Roundtable. Honorary members of the Presidential Roundtable are President George Bush, President Ronald Reagan, President Gerald Ford. The Presidential Roundtable chairman is also Vice President Dan Quayle and, of course, the letterhead lists Mitch McConnell, Steve Forbes and Senator Santorum of Philadelphia.

    This is a marvelous letter, which I would like to place in the record, and I would like to read a portion of it at this point.

    . . . I am pleased to inform you that in recognition of your personal achievements, I have nominated you to serve as one of Virginia's representatives on the Republican Presidential Roundtable. This is an exceptional honor that I hope you will not pass up. For as America prepares to meet the challenges of the 21st Century, my Republican Senate colleagues and I genuinely need your help in shaping the new agenda that will guide both our party and our Nation.

    You see, the Presidential Roundtable is a unique group of only 400 Americans, whose membership includes corporate CEOs, small business owners, doctors, bankers, executives, entrepreneurs, community leaders and concerned citizens. . . . And now that a vacancy has occurred among the coveted 18 Presidential Roundtable memberships reserved for Virginia, I sincerely hope you will consider stepping forward to claim it.

    The letter goes on in very interesting detail, outlining all the good things that will come the way of my friend if he steps forward and becomes 1 of these 18 members from Virginia of the Presidential Roundtable.
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    Today, our biannual Roundtable Forums continue to provide opportunities for members to meet regularly in both formal and informal settings with the great decisionmakers and political leaders of the 1990's, including Majority Leader Trent Lott, the entire Republican Senate Leadership, the powerful Chairmen of standing Committees of the U.S. Senate, and the GOP's newly-elected Senators who are well-positioned to lead America far into the first decade of the 21st Century.

    Now, I don't want to read the whole letter, but I will read the operative phrase. It says,

    I hope you will take a moment to complete your Membership Acceptance and return it today, along with your personal or corporate check, or partial membership dues payment of $5,000, $2,500, $1,250 or $1,000.

    This will give you an opportunity, I am quoting again, of ''an even greater opportunity to forge the lasting friendships with our Senators that have become such a hallmark of a Roundtable membership.''

    Mr. BURTON. Mr. Lantos, if I might interrupt. I think you made your point and if you could conclude.

    Mr. LANTOS. Not quite, but I have made a portion of my point.

    Mr. BURTON. You are doing very well, but if you could conclude, we would appreciate it because we want to stay as close to the 5-minute rule as possible, sir.
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    Mr. LANTOS. Well, when we return, I would like to conclude this letter, if I may.

    Mr. BURTON. Your time has expired and, as I said earlier, we want to keep every Member as close to the 5-minute rule as possible. We will allow latitude to the ranking member and myself, but I don't want to go beyond that. We have 40-some Members here, sir.

    Mr. LANTOS. May I finish then?

    Mr. BURTON. OK.

    Mr. LANTOS. ''We have already arranged for Roundtable members to have personal photo sessions with the entire Republican Senate Leadership when we gather at the welcoming reception on Tuesday evening.''

    The letter speaks for itself. It is signed by Senator Mitch McConnell, chairman of the Republican Senatorial Campaign Committee. And I think it deals with the issue of access and payment for access.

    Now, I find the letter nauseating, but no more nauseating than similar letters emanating from the Democratic side and if we would just get rid of the hypocrisy that permeates this hearing, which says that the Democrats are doing these horrible things while we

pure Republicans are merely dealing with the public's business, the American people would have a greater degree of trust in their Government.
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    I thank the Chair.

    [The information referred to follows:]


    Mr. BURTON. Thank you, Mr. Lantos. And if you accede to the wishes of the Republican National Committee, be sure not to do it on Federal property.

    The committee will stand in recess.

    Mr. LANTOS. They sent me the letter on Federal property.


    Mr. BURTON. We will reconvene the meeting. The Chair now recognizes the gentleman from Illinois, Mr. Hastert.

    Mr. HASTERT. I thank the chairman. Mr. Chairman, I think the real question of these hearings addressed the searing question of have the election laws of these United States been broken? And have the election laws of this country been broken or circumvented by the campaign committee of the chief law enforcement officer of this Nation?

    The real issue here is will these hearings be used by some to divert our attention from that issue and instead use it for a launching platform for, quote, campaign reform, end quote.
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    Mr. Chairman, we need to keep our focus on one question: Have the election laws of this country been broken intentionally or unintentionally? As chairman of the Subcommittee on National Security, International Affairs, and Criminal Justice, I want to simply and directly state my concerns about the potential threat to our country's security that may have been and may continue to be posed by foreign influences on our electoral process.

    The peril associated with direct foreign influence on our elections should be obvious. This Nation is a democracy and a democracy is not for sale. And one more point: If foreign governments have been contributing to U.S. elections, they have not been doing so for our benefit. Any such contributions would, by definition, imperil our Nation's security, since the reasons for contributions would likely be to secure favors and extend influence. I won't belabor the point, but it is central to this inquiry.

    The primary inquiry of these hearings, from my perspective, is twofold. The threshold question is: Did the Chinese Government contribute to the Democratic National party or any other campaign organization?

    The second question is: If it can be shown that the Chinese Government was involved in contributing to the Democratic National party or any other campaign organization, did the Chinese Government receive any special benefits in return for its contributions to the Democratic national campaign organization?

    I am reserving my judgment on both of these inquiries. But as to the first inquiry, I do believe that the evidence so far supports the proposition that the Chinese did contribute to the DNC.
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    Congress has documented that money came from China. This money appears to be coming through conduits to the Democratic National Committee and literally to the very doorsteps of the White House. I await further evidence in either direction on this point.

    As to the second question: Did the Chinese Government obtain any benefits from the alleged illegal contributions? Was there a quid pro quo? I am not a lawyer, but it appears obvious that we may eventually need to hear from someone who can detail the conduct and motivations of the President if we are going to get to the bottom of this money trail.

    As Judge Sirica once said, in a different context, follow the money, follow the money, follow the money.

    Accordingly, I think we should make every effort, in a bipartisan way, to get eyewitnesses before us. I also sincerely think that the President should help us in this, particularly if the witnesses in question remain overseas. Furthermore, some witnesses who could explain the facts have asserted their fifth amendment right not to incriminate themselves.

    It concerns me, and I think it should concern every American, that there are so many people close to the President who believe that they may have committed a crime. That fact should give us all pause. At least as our investigation relates to those who have asserted their fifth amendment rights, we will probably never know the specific role the administration played unless we are able to get and grant immunity to these witnesses.

    In my opinion, there comes a time when the people's right to know may outweigh the necessity to send these witnesses to jail.
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    In the realm of national security, one fact bothers me more than any other and that fact is this: Shortly after Mr. Clinton became President, evidence shows he went out of his way to ensure that China obtained extremely sensitive technology. This was technology previously blocked by national security restrictions. Examples of the technology included turbo fan jet engines for missiles, sophisticated computers that provide guidance for military aircraft, and actual rocket missile guidance systems.

    I await further testimony and documents, but I will confess that the campaign fund-raising issue for me leads down many trails. And the one that troubles me the most is the one with national security implications. That said, I shall not prejudice the testimony we may hear today or which we may expect to hear in the future. I shall listen to all the facts with an open mind. I thank you, Mr. Chairman.

    Mr. BURTON. I thank the gentleman from Illinois. Does he yield back the balance of his time?

    Mr. HASTERT. I yield back the balance of my time.

    Mr. BURTON. The gentleman yields back the balance of his time.

    Mr. Kanjorski.

    Mr. KANJORSKI. Thank you very much, Mr. Chairman.

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    Mr. Chairman, I begin this set of hearings with disappointment today. I first came to this great city and to serve in this great capital some 44 years ago, in 1953, the last Republican Congress before the 104th Congress; that was the 83d Congress. I had the pleasure to serve during the first administration of President Dwight David Eisenhower. And unaccustomed as I was to this city at that time, as a young man I discovered that individuals will be attacked in this political system for reality or for appearance.

    And during that administration, a great historical name of Sherman Adams, from the Adams family of Massachusetts, had to surrender his position as Chief of Staff to the President because of what was then called a vicuna coat. Since that time, vicuna coats have gotten much larger and have become the habit of American politics.

    I would have been overjoyed and very satisfied with my service in Congress if I had known that we were coming together in this committee to do something substantive, to really free up what has become a cancer on the political process of this country.

    Unfortunately, I do not think any of us have arrived with our surgeon's tools today to treat that disease. Instead, we have arrived with pre-conclusions, illogical conclusions, and a willingness to jump to facts. Even though most of us are legally trained, I have never heard so many lawyers willing to have a finding before the evidence is in, and before the facts can be arranged in any logical order to force a conclusion. But be that as it may, this is Washington, DC, and I appreciate that.

    I think today, however, Mr. Chairman, you have an opportunity, an unusual opportunity, to change the history of the last 9 months and to go at this to really leave a legacy to the American democratic system; and it needs help. If honestly we were to propose new procedures and effects and go at this investigation in a professional way, without preconceived conclusions or notions, we could work great contribution to the American political system.
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    If we continue in the type of diatribe we have heard from some of the Members this morning, in having previously concluded—I don't know why we are holding a hearing in some instances—or seizing upon innuendo, conjecture and conclusions that are not warranted by any of the facts or evidence that I am aware of at this point, if we have that type of hearing, we are going to have nothing but a partisan charade that will accomplish nothing and signify something that disturbs me.

    And the thing that disturbs me is that there is an unwillingness, it seems, in the Congress, in this committee, to accept the fact that in November 1996, there was a Presidential election and the present occupant of the White House won that election.

    And I thought that the examples learned in 1993, with trying to reverse the 1992 election with Whitewater and everything else that has preceded ad infinitum, would not be carried out in the second term of this Presidency; that with prosperity in this country beyond imagination, with peace in the world that our generation never had, and with major problems that this Government and this President could attain to, we in a very partisan way, on both sides, have slipped into this quagmire, if you will, to attack personalities and people without justification sometimes.

    I cannot excuse some of the mistakes made by this White House in providing information to this committee or the Thompson committee, nor will I attempt to do it. But I will not judge it as being criminal in intent or malicious in some way. Quite frankly, I would hope I would give it in the same way that I sometimes listen to the diatribe of my friends on the other side of the aisle, and I just say they do not really mean to do evil; they just do not understand. And I would hope that if we looked at that in the White House, we would understand the same thing.
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    But going beyond this President and this White House, what opportunity do we really have? Is there anyone on this committee or in the Congress today that does not know that special interest money, huge corporate money, huge union money, huge wealth money, is permeating policy decisions both in this Congress and probably in the executive branch? And quite frankly, it probably has always been that way. But there was some reasonable suppression of it, control of it, guidance of it, exposure of it that today seems to be lacking.

    I do fear for American democracy as I have seen it through most of my lifetime, because I am not sure my daughter or her children are guaranteed to see this process work too much into the future if we do not do something to cut out this political cancer that exists, and it exists in money. It exists out there in the press and the media and the fact that we cannot talk to constituents anymore, but have to spend thousands and tens and hundreds of thousands of dollars on single 30-second attack ads in order to elect ourselves to office, whether it be here in the Congress or in the Presidency.

    We know that sometimes that money comes with not direct connection to position, but indirect. Certainly, people do not contribute millions of dollars—I think Mr. Lantos this morning pointed out an example, an $8 million fine for the contribution to multiparties, multi-individuals, most Republican, of $180,000—$160,000 went to Republicans—and it was done with the intention of having some influence. Should we have known that? Will we know that in the future? Can we do something about it? Yes, if the Congress directs itself to campaign finance reform.

    Mr. Shays, on the other side, has a reasonable position on that. Mr. Tierney on our side has a reasonable position on that. We had an opportunity lost in the Senate yesterday. Or are we going to waste opportunity and go down this terrible road of being purely partisan and enforce what the American people already believe about these investigations; that they are nothing but partisan attacks to disturb and dislodge the success of this President in his second term?
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    If that's the case, we don't deserve their attention. But if we strive for higher ideals and intentions, we will catch the imagination and the appreciation of the American people.

    Thank you.

    [The prepared statement of Hon. Paul E. Kanjorski follows:]


    Mr. BURTON. The gentleman's time has expired.

    Mrs. Morella.

    Mrs. MORELLA. Thank you. Chairman Burton, I want to indicate my appreciation for your convening today's hearing. Our committee has a responsibility to investigate the political fund-raising practices surrounding the 1996 elections. We have been charged with determining which campaign finance laws have been broken and how domestic and foreign contributions have been parlayed into policy.

    Both the Senate Governmental Affairs Committee and the press have raised serious questions about campaign donations and fund-raising practices, both illegal and legal, in the 1996 election cycle.

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    Many of these troubling questions remain unanswered and the American people deserve answers. Why is the White House stonewalling this investigation by retaining critical documents and tapes? Why did the DNC ignore critical information about donors and fail to do background checks? How did contributors gain access to the White House? Did these contributors influence policy? Why have many of our key witnesses left the country?

    Tomorrow, we will hear from witnesses who gave conduit contributions at the request of Charlie Trie and John Huang. The witnesses who will testify before this committee are linked or privy to suspect fund-raising activities, many of which are illegal.

    Clearly, the Federal Election Campaign Act prohibits contributions by foreign nationals in connection with any election. But it has become increasingly difficult to distinguish which campaign practices are legal and which are not and, most important, which campaign practices should be illegal.

    Soft money began to fill campaign coffers following the Federal Election Campaign Act amendments of 1979, which allowed a greater role for State and local parties by exempting certain grass-roots and generic party-building activities from FECA coverage. And although they are legal, soft money contributions have led to questionable fund-raising practices and to the escalating costs of elections.

    This is my hope for our committee's hearings; I hope it is shared by all the members of the committee: that we thoroughly investigate the very serious allegations of violations of law, patterns of misconduct and abuses of power by high-ranking Government officials; that we do so in a bipartisan manner; that in the course of our investigation we shed light on what should be illegal and that our investigation leads to an overhaul of our existing campaign finance laws.
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    There is no doubt that loopholes in existing campaign finance laws invite the kinds of abuses we will examine in the days ahead. So as we look at violations of current campaign finance law, we must also address the law's shortcomings. To ignore this reality is to waste an opportunity to enact real reform.

    As I mentioned, our committee has the responsibility to conduct this serious investigation, and with this responsibility comes the duty of each of our Members to seek answers in a professional, fair manner.

    I believe Chairman Burton, I take him at his word, that our committee's investigation will follow the evidence wherever it leads, and I will ensure that this is the case.

    Campaign finance violations bring all of us down in the eyes of the American people, the very people whom we are here to serve.

    In the coming months, it is critical that we take a stand against that which is illegal, no matter which party is guilty, and reform our laws to curb the excess of soft money and other abuses that should be illegal.

    Mr. Chairman, I yield back the balance of my time. I thank you for the opportunity.

    Mr. BURTON. The gentlelady yields back the balance of her time.

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    Mr. Condit.

    Mr. CONDIT. Thank you, Mr. Chairman. I think to a person we all support congressional oversight and investigation of this issue. Some of us, on both sides of the aisle, think we ought to be taking a serious and hard look at the way we finance our political campaigns, but this committee should be willing to look critically at potential violations of law, regardless of political party, and we ought to be willing to follow the trail wherever it leads us.

    We started this process several months ago with the idea of—hope of fixing a broken system. Since then, we have deposed 57 witnesses. The question is: What have these 57 witnesses told us that we didn't already know or that wasn't already available? Seeking the truth and doing it in a cost-efficient manner are not opposing views, and that's the real point I am trying to make to this committee, Mr. Chairman, that they are not mutually exclusive.

    We can and we should continue to seek the truth. That ought to be our No. 1 goal. But we should do it in a cost-effective manner for the taxpayers of this country. We can do both and we should do both.

    The amount of redundancy and duplication in this investigation, frankly, is ridiculous. Being thorough in our investigation and ensuring that we do not waste money is where our emphasis ought to be. We have a dual responsibility. We must seek the truth but that doesn't mean that we have to waste the taxpayers' money in doing so.

    We have spent, as it has been mentioned several times, $3 million in this body alone, to say nothing of the millions of dollars spent on the other investigation by the other body. On top of that, we have committed hundreds of hours of staff and personnel time to this investigation.
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    And what about the burden we have placed upon the witnesses? We have asked them to come here, share with us the information that they have. We have deposed them. For the most part, on their own expense they have come and provided that information.

    Ultimately, most of them will never even be asked to testify before this committee. What we ought to be doing is setting our sights on ensuring that the money we spend is not being thrown away in a very cavalier way.

    If we are sincere in being here today, then we ought to agree on a clear focus of this hearing, Mr. Chairman. I wholly—I support seeking the truth. I once again think that is the point here. But to go blasting away in some random manner hoping that we hit something or stumble into something is just plain irresponsible.

    The main problem with this investigation is that we are not conducting it in a cost-efficient manner, and I hope by the end of this investigation that we can report to the American people that something substantive has transpired.

    Now it is time, I believe, for us to find a solution, and we all know that is a very easy thing to say. In reality, it is very hard to do. But it is time for us, I believe, to come up with a solution and find a legislative remedy. And let us use this hearing as a springboard to enact some of those solutions, like campaign finance reform. Let's set a date when this hearing will end, and then move forward with that plan or that solution.

    Mr. Chairman, we all support this investigation and the oversight. We need to ensure that we follow the course that is being laid out as quickly and as efficiently and as effectively as possible and waste as little taxpayer money as we possibly can. We owe that to the American people.
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    With that, Mr. Chairman, I yield back the balance of my time.

    [The prepared statement of Hon. Gary A. Condit follows:]


    Mr. BURTON. The gentleman yields back the balance of his time.

    Mr. Shays. Oh, excuse me, Mr. Gilman.

    Mr. GILMAN. Thank you, Mr. Chairman, and my colleagues. Throughout this session of Congress, our Government Reform and Oversight Committee has performed an arduous task of investigating campaign finance improprieties and any possible violations of law. This task became necessary as press revelations in the weeks prior to the 1996 election period raised questions about the Democratic National Committee's fund-raising practices, ranging from funneled foreign contributions to violations of domestic fund-raising laws.

    These revelations include the related activities of John Huang and Yah Lin Charlie Trie both who reportedly contributed funds in the names of other people and both reportedly facilitated the contribution of foreign funds into the Democratic National Committee. John Huang refused to cooperate with our committee's investigators by invoking his privilege against self-incrimination, while Charlie Trie has fled the country and is thought to be somewhere in the People's Republic of China.

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    Under the Federal Election Campaign Act, contributions in connection with any election are prohibited by foreign governments, by political parties, corporations, associations and partnerships, individuals with foreign citizenship and immigrants not lawfully admitted for permanent residence.

    In addition, FECA provides that no person shall make a campaign contribution in the name of another person or knowingly permit his or her name to be permitted to effect such a contribution. Accordingly, the American people are in need of the facts to determine whether or not their political leaders in Washington have been abusing current Federal campaign laws and whether the current campaign finance system has been working effectively.

    Furthermore, and more important, the American people need to be able to discern whether foreign contributions and resources are influencing our Nation's campaigns. The committee hearings on which we are about to embark will hopefully assist us in answering these very important questions.

    Our committee's investigation has included 55 individual subpoenas, 76 bank subpoenas, 39 depositions, all within the past 7 months. The Department of Justice has yet to appoint an Independent Counsel, even though campaign finance improprieties continue to be revealed and reported on a daily and weekly basis. This, in light of the fact that FBI Director Freeh not long ago called for and stressed the need for an Independent Counsel in this current campaign finance scandal.

    Moreover, along with many of my colleagues, I believe that we should adopt meaningful campaign finance reform, something we are all interested in. And I am heartened with the course of action taken to date by our full committee. The allegations we have been investigating follow an election cycle that discussed record amounts of money being spent on Federal campaigns. This trend of escalating campaign spending and abuses raises many concerns that the campaign finance laws enacted in the seventies are no longer adequate and need serious reform.
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    I believe that our committee is proceeding in the right direction, and I look forward to continue to work with my colleagues in ensuring that our Nation's campaign finance laws are going to be adequate and up to the challenge in meeting the current trend of increased campaign spending.

    Accordingly, it is of utmost importance that we put an end to any current abuses and to restore the American people's trust. The hearings on which we are about to proceed are a positive step in that direction.

    Thank you, Mr. Chairman.

    Mr. BURTON. The gentleman yields back the balance of his time.

    Mr. Sanders.

    Mr. SANDERS. Thank you, Mr. Chairman. I would just like to make two points and pick up on something that Mr. Kanjorski said a moment ago, and that is in November 1998, Mr. Chairman, there are going to be national elections and what the experts tell us is that about two-thirds of the American people are not going to bother to vote. We had the lowest voter turnout of any industrialized Nation on earth. There will be districts that Members come from where 25 percent of the people will vote.

    Now, there are a lot of reasons why the American people are giving up by the tens of millions in the political process, but I would argue that certainly one of the reasons is their belief that our campaign finance system is totally corrupt; that big money dominates what goes on here and that for ordinary people and working people, low-income people who don't have the $50,000 to contribute at fund-raising dinners or the $100,000 to contribute to the parties of their choice, that they are not—that their voices and their needs are not going to be heard. I think that is basically a true statement.
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    There is a reason why this institution gives huge tax breaks to the rich and does not have a national health care system, or we had to fight so hard to raise the minimum wage to all of $5.15 an hour, and so forth and so on. The American people understand that.

    They are not naive and they understand that when somebody contributes several hundred thousand dollars, maybe to both political parties, they are getting something for their dollars.

    Now, if these hearings and the work of this committee is nothing more than for the—and I say this as an Independent—for the Republicans to say, gee, we are great. We never have any problems. Those terrible Democrats in the White House, gee, they are just evil, but not us. No one is really going to believe that and they shouldn't believe that. Everybody knows that the system is affecting everybody.

    So if this committee is really going to have an impact on what goes on in Congress and what goes to—what I think the American people perceive, we are going to have to fight to expose everything that is going on and then the direction must be to lead us to real campaign finance reform. No one is going to take this seriously if all that we do is say that the White House is terrible, terrible, terrible but, gee, no, I am not going to vote for real campaign finance reform. I am not going to vote or fight to make sure that big money does not continue to control the political process.

    So I would hope, Mr. Chairman, and I think Mr. Lantos made this point, Mr. Kanjorski, others have made this point, you have an enormous responsibility. You can play a role in turning the politics of this country around by leading us in the direction of real campaign finance reform and take away the power of big money in controlling the agenda here. That's the first point.
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    The second point that I want to make, Mr. Chairman, I make as the ranking member of the Subcommittee on National Economic Growth, Natural Resources, and Regulatory Affairs. As you may know, last year Chairman McIntosh of that subcommittee asked the GAO, the Government Accounting Office, to thoroughly investigate the computerized Rolodex at the White House.

    This little known investigation into a computer data base has ballooned into a substantial portion of this committee's campaign finance investigation. I am not sure that many of the Members know that. As the ranking minority member of that subcommittee, I am deeply concerned that the subcommittee may be wasting the taxpayers' money in overusing the committee's deposition authority on this obscure inquiry.

    Mr. Chairman, this narrow investigation has eaten up hundreds of thousands of committee dollars since its inception over 1 year ago. It has consumed——

    Mr. MCINTOSH. Would the gentleman yield?

    Mr. SANDERS. Let me finish and then I will yield.

    Mr. MCINTOSH. I will be glad to explain what the money is being used for, if the gentleman would yield.

    Mr. SANDERS. Pardon me?

    Mr. MCINTOSH. If the gentleman will yield, I would be glad to give a summary of what the money was used for.
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    Mr. SANDERS. Let me finish and then I am happy to yield. OK?

    It has consumed 15 of the 57 campaign finance depositions. In other words, over one-fourth of the committee depositions were limited to questions about the data base.

    In addition, Mr. Chairman, it has cost the White House hundreds of thousands of dollars during just one 3-month period in which the White House tracked the cost of responding to this investigation; and the related GAO audit, it estimated that the response cost the taxpayers $155,000, and that's over a 3-month period.

    In addition, the witnesses that have been deposed have had to hire counsel at a potential personal cost of thousands of dollars. This can be a significant burden on the witnesses called by the committee, one of whom is an unpaid volunteer, as I understand it, at the White House.

    I would conclude by saying, I don't think the American taxpayers approve of us wasting hundreds of thousands of dollars on a political fishing expedition. I don't think they want more than one-quarter of the committee's campaign finance depositions to be on an obscure investigation of a computerized Rolodex. Unless the committee can demonstrate that the White House data base investigation is not a waste of taxpayer dollars, this costly and partisan investigation should be dropped.

    And I would be happy to yield to my friend, Mr. McIntosh.

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    [The prepared statement of Hon. Bernard Sanders follows:]


    Mr. MCINTOSH. Thank you very much, Mr. Sanders.

    Let me say very briefly that this investigation is continuing apace. We found out very early on that this White House computer data base was used to keep track of the coffees and the use of the Lincoln bedroom for campaign fund-raising, something which the White House's own lawyers told staff of the President would be an illegal purpose if it were for campaign or political fund-raising.

    We are continuing to depose all of those who were involved in creating and using the data base to find out exactly what happened and still have many more depositions to go forward in doing that.

    We want to give every opportunity for this White House to justify the purpose for something that clearly appears, on its face, to have been intended to be an illegal theft of Government property for political purposes. We need to find out what happened and report to the American people about this. Thank you.

    Mr. WAXMAN. Will the gentleman yield?

    Mr. SANDERS. Yes, I would yield to Mr. Waxman.

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    Mr. WAXMAN. I hope that with the same zeal we look at some of the ways Members of Congress have conducted their affairs, whether they have made phone calls out of their offices, whether they have used their Government allotments for campaign purposes. Maybe we ought to look at their data bases and stuff like that.

    I think that it just seems a little bit hypocritical when we see attacks only in one direction and only one partisan direction. I would just point that out.

    And I thank the gentleman for yielding.

    Mr. BURTON. The gentleman's time has expired.

    Mr. Shays.

    Mr. SHAYS. Thank you, Mr. Chairman.

    Mr. Chairman, I am troubled by this investigation. I am troubled by the serious violations of law. I am troubled by abuse of fund-raising practices that, while perhaps not technically illegal, are obviously wrong. I am troubled by the administration's strategy of lawyerly word games, inadvertent discovery and delay; troubled that so many witnesses have taken the fifth, fled, forgotten or simply have refused to cooperate; and I am troubled when partisanship blocks the path to individual accountability for abuses and to reform of a system so eagerly and thoroughly abused.

    Our job is to judge the extent and impact of illegal foreign contributions, money laundering and other campaign finance abuses that have threatened our national security and undermined the integrity of domestic political process.
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    Our commitment is to follow the evidence wherever it leads, without regard to partisan political calculations. But that job has been made far more difficult because, as has been noted, 39 witnesses have asserted their fifth amendment right against self-incrimination, 39 witnesses; 11 potential witnesses have fled the country, 11 witnesses; 11 foreign nationals have refused to be interviewed; and the number of witnesses with blank memories grows daily.

    Do I believe the former chairman of the Democratic National Committee, Mr. Fowler, cannot remember when the National Security Council warned him that Roger Tamraz was a national security risk? I am sorry. I cannot believe him.

    Do I believe the Vice President of the United States did not know that when he went to the Hsi Lai Temple it was a fund-raising event? I am sorry. I cannot believe him.

    The only difference I see so far between the terrible abuses in the Nixon White House and the terrible abuses in the Clinton White House is the Nixon White House abuses happened under Republican watch and were investigated; the Clinton White House abuses happened and are happening under Democratic watch.

    The administration is still haphazardly finding materials, obviously within the scope of subpoenas issued by this committee 7 months ago. And from my review of the transcripts, it appears the committee minority staff's only contribution to the examination of witnesses has been to trivialize the investigation and to apologize to the witnesses for the inconvenience of having to give a deposition.

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    Nevertheless, our charge remains twofold: One, find out who abused the system; and two, recommend systemic statutory and regulatory repairs to fix what is wrong.

    In past investigations, it was not enough then to say the system is broken, everybody does it, so let's just pass a law without bothering those responsible. It is not enough now. Just as it is not enough to fix individual culpability without drawing and applying a larger lesson to rehabilitate a system that induces otherwise good people to do undeniably bad things.

    For the protection of their fundamental freedoms, the American people must rely on the wisdom of our laws and the integrity of the men and women sworn to uphold those laws. Here we had a failure of both. Porous laws were exploited by unscrupulous people. Our sworn responsibility demands we investigate and remedy both. Until we do both, our work is not complete. Unless we do both, our troubles have just begun.

    With that, Mr. Chairman, I yield back the balance of my time.

    Mr. BURTON. The gentleman yields back the balance of his time.

    Mrs. Maloney.

    Mrs. MALONEY. Thank you, Mr. Chairman.

    Mr. Chairman, there are a lot of very positive things going on in America. Unemployment and inflation are at a 25-year low. Crime in our major cities is down, with our largest city, New York, leading the way. But Americans don't think Washington is improving their lives. In the last Presidential election, we had the lowest turnout in generations; less than 50 percent. The American people don't associate low mortgage and student loan rates with fiscal discipline in Washington, because all they see coming out of Washington is Republicans and Democrats trying to destroy one another over campaign finance abuses.
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    Each week, there is a new outrage. We learn about a new violation of the spirit, if not the letter, of the campaign finance laws. Americans are turned off so they are tuning out. They aren't participating in their democracy because they think their democracy is a little out of their price range.

    These hearings will clearly demonstrate that soft money, those unlimited contributions made to political parties, is at the root of the campaign finance abuses this committee is investigating.

    Whether it is delivered by a well-healed tobacco lobbyist or a nun who has taken a vow of poverty, soft money is a plague on both of our houses, both Democrat and Republican. It creates the impression, true or false, that you have to pay to play and that legislating is just something we try to squeeze in between fund-raisers.

    What soft money boils down to is a loophole that circumvents restrictions on hard money. We can and we must close this loophole. Letting it stand, either by doing nothing or cynically undermining reform efforts with deliberate poison pills, is nothing less than a betrayal of American democracy.

    Washington is not irrelevant to America. The values on which Washington was built make America possible. Our broken campaign finance system has placed those values in jeopardy. In footing the bill for this hearing, the American people don't want us to protect the system; they want us to clean it up. They doubt we can do it and for good reason.

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    Let us work together across party lines to rein in soft money and prove once and for all that our democracy is not for sale.

    Tomorrow, we will hear from people who allegedly served as conduits to get illegal money into the DNC, people who were apparently used by others to circumvent contribution limits and to break the law. This is not news. Since 1992, the Federal Election Commission has investigated 67 foreign contribution cases. The agency is looking into 27 alleged conduit payments. Their records include discoveries of a man who couldn't pay his bills or pay his child support but managed to funnel $600,000 in foreign contributions to the Republican party in 1992.

    There are plenty of skeletons in closets on both sides of the aisle. This is not a one-party problem. Nor is it a new problem.

    My colleagues on the other side of the aisle enjoy pointing fingers at Democratic fund-raising, but when the focus shifts to their own fund-raising and the problems of the entire political system, they abruptly change tactics. That is why the Senate stopped its investigation in midstream. As Senator Collins, Republican of Maine, said last week—and she was quoted in the New York Times, ''For the first time, it looked like the focus would be much more on ourselves. It is easier for us to sit in judgment of another branch of government, the executive branch, than to sit in judgment of ourselves. I believe we should go forward to learn the truth about these abuses, but I will be very surprised if we learn anything that is either new or startling.''

    We will hear a lot today, we have already heard a lot today, about, ''enforcing the laws.'' But when it comes to funding the Federal Election Commission, the agency whose job it is to enforce these laws, my colleagues are afraid to put their money where their mouths are.
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    We should let the Federal Election Commission do its job so that we can do ours. And our job, Mr. Chairman, is not simply to assign blame, but to reform the system.

    There are before Congress now 80 different pieces of proposed legislation to reform campaign finance laws. Yet not a single one of them has made it to a hearing.

    Mr. Chairman, it is time to stop fixing the blame and to start fixing the problem.

    And I yield back the balance of my time.

    Mr. BURTON. One second.

    I would just like to make one real quick point before we go to the next witness.

    It has been mentioned several times that we have not issued subpoenas that were requested by the minority, and while there have been some problems, the minority subpoenas have been withdrawn, according to our counsel, and he has been trying to work things out with the minority counsel to facilitate some of these subpoenas being granted.

    Now, we cannot say we are going to grant all of them, but we really can't grant subpoenas that you requested when you have withdrawn that request; and that is one of the concerns that we have.
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    Mr. WAXMAN. Will the gentleman yield to me?

    Mr. BURTON. I will be happy to yield.

    Mr. WAXMAN. We withdrew our request for subpoenas after they sat pending for over 3 months without any action. We saw no purpose in having those subpoena requests hanging out there and being further ignored.

    Mr. BURTON. Well, let me just respond by saying, our new counsel is willing to sit down and try to facilitate some assistance for you in getting some of these subpoenas granted.

    The next person to speak is Ms. Ileana Ros-Lehtinen.

    Ms. ROS-LEHTINEN. Thank you so much, Mr. Chairman. As a Cuban American and a congressional representative from south Florida, I am especially interested in knowing the relationship between certain alleged illicit contributions made by south Florida residents and their effect upon United States-Cuba relations. Specifically, I would like to know why Jorge Cabrera, a convicted felon and drug dealer, states that he was approached for a $20,000 contribution to the DNC in exchange for an invitation to a fund-raiser with Vice President Al Gore.

    Was his background as a drug dealer not investigated? Even if Cabrera's reputation and past convictions were ignored, did someone not wonder as to the origins of his $20,000 check, which came from Mr. Cabrera's checking account that supposedly includes funds from Colombian cocaine deals?
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    Mr. Cabrera has been convicted for trafficking in 6,000 pounds of cocaine and now sits in a Federal penitentiary fulfilling a 19-year sentence. The supposed solicitor of this contribution, who Mr. Cabrera claims was Vivian Mannerud, is a major contributor to the Democratic party, an owner of an airline charter company that flies to Havana, and is also a renowned sympathizer of the repressive agenda of the Castro dictatorship.

    Mr. Cabrera claims that he met with Ms. Mannerud at the Copacabana Hotel, a posh hotel in one of Havana's most exclusive areas, and I would like to play a little song here.

    [Song played.]

    [The lyrics follow:]


    Ms. ROS-LEHTINEN. We will hand out the words to the Members. And it says that at the Copa, Copacabana, the DNC spot in Havana; and we want to know what the connection is. And the location where this petition took place, Havana, Cuba, home of the tyrannical Castro regime, certainly brings a lot of questions to mind. Considering United States-Cuba relations in the past, does not Mr. Cabrera's claims, that the petition for a donation took place in Havana, Cuba, conflict with United States foreign policy?

    If Mr. Cabrera's claims are true, is the DNC condoning the practice of United States residents visiting Cuba, a country controlled by a totalitarian regime, in order to solicit funds in the Cuban capital for the United States Presidential campaign?
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    Another concern of mine is the recent testimony given by a plantation Florida businessman, R. Warren Medoff before the Senate Governmental Affairs Committee. On October 22d of last year, Mr. Medoff attended a $1,500 a plate Coral Gables fund-raiser intending, he said, to urge the President to renew flights to Cuba. These flights had been banned since March, when Castro's fighters killed four innocent men and shot down their planes, which were on a humanitarian mission, flying over international waters.

    Mr. Medoff said that he indicated to the President that he could offer the Democratic party a $5 million gift. The President, states Medoff, responded by saying, you can tell the people that they will be able to fly.

    The flights were resumed the same day.

    Based on Mr. Medoff's claims, one wonders, is the White House, in consideration for a substantial contribution, $5 million, willing to forgo the loss of American lives who were flying over international waters and who were shot down by Castro in order just to fill up its treasure chest?

    And I would like to bring up the ties of one south Florida resident, John Henry Cabanas, a Key West businessman, who has publicly expressed admiration for Castro, saying, ''Fidel is like my father and I believe that he loves me like his son.'' Federal records show that Mr. Cabanas appears to have contributed or helped in steering over $62,000 to the Democratic party and its candidates.

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    A lawyer at the Treasury Department states that United States law prohibits a person from knowingly and willfully engaging in a transaction with Cuba or a Cuban national. According to sources, Cabanas flouted that law for decades by spending money and receiving payment for his work in Cuba before he left in 1988.

    There is also the issue of Mr. Cabanas' alleged counterintelligence work. According to two former Cuban intelligence officials, Cabanas was a full-time agent of the Interior Ministry State Security Department. A defector and a one-time 20-year Interior Ministry intelligence officer also said that Cabanas' specific job was to spot spies among foreigners in Cuba, including diplomats, journalists and tourists. Mr. Cabanas' counterintelligence work for the Cuban regime is also very alarming.

    Did the Democratic party, in its frenzy to obtain sufficient funds to re-elect the President and oust the Republican Congress, allow for contributions to be made by ex-spies of a totalitarian and repressive dictatorship? And has this spy been able to influence United States policy toward Cuba?

    It is necessary to investigate whether any of these contributions have resulted in the softening of United States policy toward the Castro regime, and I hope that this committee examines to the fullest any intent by the Castro regime and its sympathizers here in the United States of influencing United States policy toward the Cuban dictator.

    And I thank the chairman for the time.

    Mr. BURTON. The gentlelady yields back the balance of her time.
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    Mr. Barrett.

    Mr. BARRETT. Thank you, Mr. Chairman.

    Today, as we begin what will no doubt be a long and extensive probe into Democratic party's fund-raising activities, we start down a path clearly defined by the lines of partisanship. We will focus on the alleged misuse of funds and the skirting of campaign laws by one party and one party only.

    I acknowledge that some wrongdoings may have occurred as a part of the fund-raising efforts by the Democratic party during last year's elections. Some of these improprieties have been brought to light by Senator Thompson's investigation.

    I believe that those who have committed illegal acts in the effort to finance Federal campaigns should be dealt with accordingly. Breaking the laws that regulate our elections cannot be tolerated. I also believe, however, that any committee of Congress investigating wrongdoing should not focus all its energies and resources on the persecution of one political party, be that party in the majority or the minority.

    Let's face it, candidates raise money. And last year the GOP set new records for raising it, and they didn't raise it all from widows and choir boys.

    In order to fully understand the depth of the problem, we should be looking at all methods that are used to abide by or skirt the campaign laws. That includes methods used by both parties.
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    Now, from the get-go, this committee has brandished a partisan flag and the chairman has refused to even go through the motions of a fair investigation. Instead, the committee has bungled, blundered and botched this investigation and, as a result, has drawn upon this committee serious questions about its integrity.

    Mr. Chairman, we will see a constant theme develop during these hearings. We will be told that the laws are murky, compliance is difficult, and the loopholes are too big to withstand the rush of money in our elections. All the evidence will lead to one thing that this committee will not consider in the course of this investigation, that campaign finance reform is needed now. And without it, the integrity of public elections will continue its slide down the slippery slope of public opinion.

    This committee is not limited by time and the Republican leadership has indicated that it will not be lacking funding. In fact, the committee has a $3.8 million budget with access to an additional $7 million. All indications are that the committee will meander on into the next legislative year and into the campaign season in 1998.

    To date, a clear mission for this investigation has not been communicated. We have witnessed several embarrassing episodes, including the resignation of the chairman's legal team and the delays in the start of this investigation.

    Mr. Chairman, it is my hope we can work to expose the deficiencies in the campaign finance laws and that we can work together toward identifying and acting on a solution to them. Without a clear objective like that, the investigation is destined to be dragged down by partisan bickering and finger-pointing. It is time that we rise above the partisanship that has plagued this investigation.
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    I would like to applaud the gentleman from Connecticut, Mr. Shays, for his efforts to bring campaign finance reform to the floor of this House. He has shown an uncommon courage and dedication to restoring integrity to our electoral process. The Republican leadership, unfortunately, has vowed to keep the bill from being considered, but they may not be able to do so much longer. Hopefully, these hearings will prompt Mr. Gingrich and Mr. Armey to reconsider their positions and yield to the will of a good number of members to consider some sort of reform before the end of the 105th Congress.

    Thank you, and I yield back the balance of my time.

    [The prepared statement of Hon. Thomas M. Barrett follows:]


    Mr. BURTON. The gentleman yields back the balance of his time.

    Mr. McHugh.

    Mr. MCHUGH. Thank you, Mr. Chairman. Today, at long last, with the start of this hearing, the House, through this committee, joins with the Senate in seeking to answer a long and very troubling list of questions involving the possible violation of various laws, regulations and, I might add, generally accepted standards of proper behavior amongst public officials.

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    Over the past year, each day has seemed to bring new revelations about alleged improprieties, indiscretions and violations of the public trust, and with each disclosure, the faith and the confidence of the American public in their Government and in their elected representatives have sunk to lower and lower levels.

    On this, our first full day of inquiry, Mr. Chairman, it is my hope that, above all else, we will pursue and ultimately uncover and reveal the truth.

    The people of this Nation deserve to know what, if any, laws were broken and who amongst their elected representatives and public officials might have broken them. The people of this Nation need to understand that these allegations, if in any way true, will not be tolerated. They need to believe that the authority of public office does not provide a shield of immunity from the law but, rather, creates a higher standard of adherence to it.

    There are those—and we have heard them today, Mr. Chairman—who would have the people of this country believe that these hearings should be designed solely to develop a new set of laws to administer the financing of campaigns. They would have the people of this country focus blame somewhere other than on those who chose to defy the public trust and operate outside the existing legal standards.

    True, few thinking people today fail to realize the need to update and, where necessary, recraft the current campaign finance structure; and, to the extent that these sessions serve to clarify the best path toward that goal, so much the better. But the primary objective of these hearings is no more to identify the need for new laws or that the investigation of the crimes of Jeffrey Dahmer was somehow a search for new proscriptions against cannibalism.
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    We are not looking at a failure of the law. We are searching for the lawless. To those who would absolve the guilty and indict the process, I would simply ask, what in the current law has failed to earn your respect?

    What phrase, which word or mark of punctuation has led you to hold these laws in such contempt, has caused you to conclude that the alleged perpetrators are innocent, somehow victimized by a law that in your judgment is unworthy of observation?

    I would imagine that at some time in all of our childhood, Mr. Chairman, we have used that kind of excuse. We have told our parents, ''But everybody does it,'' even if everybody wasn't doing it.

    My colleagues, we are not children. Allegations of corruption, influence peddling, improper use of Federal offices and buildings and illegal interference of foreign governments on American electoral politics are not child's play. Let's not treat it as such.

    Mr. Chairman, in my part of the country, we have a saying, ''You can't fix tomorrow if today is broken.'' In America today, I fear that the political system may indeed have been broken, broken by a few who apparently were in search of much.

    It is the duty of this committee, through these hearings, to find out who, how, and why, if at all, they were indeed broken; and only then can we work together to bring about a better tomorrow, a better tomorrow by fixing today. If the American people can't ask this much of us, then we in no way deserve the high honor that they have bestowed upon all of us.
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    This is their House. This is their Government. We need to vigorously and solely pursue their interests by rooting out the wrong that may have been done and holding those who might have acted without faith and beyond the public trust fully responsible for the actions they chose of their own volition, in pursuit of their own self-interest.

    Thank you, Mr. Chairman. I yield back the balance of my time.

    Mr. BURTON. The gentleman yields back the balance of his time.

    Mr. Fattah.

    Mr. FATTAH. Thank you, Mr. Chairman. As we begin anew, I have been sitting here reminding myself that I have sat on this committee for a number of years now and that, in some sense, this is not new; that we have been investigating the Clinton administration since I got to Congress.

    First it was Whitewater or Travelgate, Filegate. We had the data base discussed earlier. And now we have the campaign finance circumstance.

    Now, I have looked at a lot of this information. I have participated with many others on the committee in various briefings. All of the information that has been shared up to this moment indicates that to the degree that a foreign government had intentions of influencing an election, that intention was focused at influencing congressional elections and State legislative elections. And I do note that through everything that has been said, we always hear these—these cute phrases that separate the allegation of the Chinese Government's influence and the abuses that we allege took place in the Clinton-Gore campaign. And I think it is important to note that if we are looking for information about the Chinese Government's influence on elections, we should start with the evidence that we have, and the first level of that is that they were interested in influencing the Congress.
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    Now, what made them think that they could influence the Congress through financial contributions? I am not sure. But it is, I think, of import that we, you know, we not try to cover up this very significant allegation by focusing in on our favorite target, which is President Clinton; and that we look truthfully for the answers as to what influence was trying to be purchased and with whom, and not miss this maybe very important national security issue by our obsession with going after President Clinton.

    The other thing that is of note is that I saw the other day that the Governor of California, who ran for President and now is thinking about running again, suggested that the Republican party should stop trying to win the next election based on this scandal mode, chasing Bill Clinton, but perhaps there may be some other issues of national importance. And I am reminded that some of my service on this committee has been productive, and that is, under the leadership of a subcommittee chairman, Chris Shays, we investigated the whole issue of the chemical exposure of our troops in the Persian Gulf. That was important. That was important work that I thought brought appropriate respect to the work of this committee.

    As we go forward now into this investigation, I would hope that we would look at, to the degree that we are looking for and searching for those who have broken the law, that we would remind ourselves—for instance, on the front page of today's Hill Newspaper, there is a significant article about an organization of funneling money into Presidential campaigns to help people avoid contribution limits.

    Now, these contributions are focused at Republican candidates for Congress. So if we are looking for lawlessness, perhaps we might look at the front page of the Hill Newspaper.
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    Or we might look now at what Chairman Haley Barbour has said. He said he went to Hong Kong. He was on a boat in a foreign land asking for millions of dollars to help elect Republicans to the Congress in 1994. That is now a subject of a grand jury investigation. If we were looking for illegal activities, if we were concerned about foreign influences in our elections, perhaps we might look at this matter.

    But seemingly the only thing that this committee is interested in doing is to somehow bring down this President, and if we can't get him on Travelgate or Filegate or the data base or campaign scandals, maybe we will get him on driving without a license.

    I did note the other day in the papers that he was driving a car at a Secret Service facility, and I am not sure whether he is a licensed driver. So maybe the committee soon, after we finish with this, can investigate that.

    But in the meantime, there are a number of issues related to campaign finances that should draw our attention and they don't all relate just to the Democratic party.

    Thank you.

    Mr. BURTON. The gentleman yields back the balance of his time?

    Mr. FATTAH. Yes, I do, Mr. Chairman.

    Mr. BURTON. Does the President have a valid driver's license?
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    Mr. FATTAH. I know you will look into it.

    Mr. BURTON. Mr. Horn.

    I am sorry. I guess Mr.——

    Mr. HORN. I am waiting until the announcement is done to start.

    Mr. BURTON. Mr. Horn.

    Mr. HORN. Yes.

    Mr. BURTON. Before we start, reset the clock, please.

    We are going to have, as I understand it, on the floor, a vote and a series of three or four votes following that. So we will, of necessity, have to recess the committee. But in the future, if we have one vote, what I will try to do is to try to keep the committee moving so we can get through all the opening statements.

    Mr. Horn.

    Mr. HORN. Mr. Chairman, some have gone to really great lengths to downplay and denigrate this committee's effort to investigate the campaign fund-raising abuses and scandals, the illegalities that occurred in the 1996 Presidential election.
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    What our colleagues refuse to come to grips with are some straightforward facts.

    Fact one: This committee has identified 61 witnesses we want to interview regarding specific questions on their involvement in or knowledge of the fund-raising practices and activities that raise real questions of illegal conduct that have violated all the laws of the United States that relate to fund-raising.

    Fact two: None of these 61 witnesses will agree to be interviewed or to appear before the committee, except the few to whom we have granted immunity. Of that total of 61, 39 witnesses have taken the fifth amendment. This group includes key figures such as John Huang, Nora and Gene Lum, Mark Middleton, Webster Hubbell, and many others.

    Eleven witnesses have left the country to avoid testifying. Among these are Charlie Trie, Pauline Kanchanalak and others. Eleven more witnesses are foreign citizens who have refused to be interviewed by this committee, the Senate committee or any other investigative arm of the executive branch that are looking into the scandal. Among these are Stephen Riady, James Riady, and Stanley Ho.

    What this suggests is that there has been a broad and remarkably consistent effort to delay, obstruct, confuse, divert and derail everything we have planned as an investigating committee. Every serious attempt to secure firsthand testimony on illegal fund-raising activities has been blocked, at least temporarily, sometimes for months.

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    That brings me to fact three. We all know that illegal fund-raising occurred in the past Presidential campaign. We know foreign money was accepted. We know contribution limits were consciously evaded. We know that our current laws were either ignored or deliberately violated.

    The one question this committee is seeking to answer is whether or not these illegal activities were the result of sloppy, undisciplined, frankly unconcerned officials at the Democratic National Committee. I doubt it. That seems to be the White House defense, however.

    The second question is obvious. Was there something more? Was it a deliberate, orchestrated effort to evade the laws in a cynical belief that the money would all be spent and the election long in their past before anyone got around to worrying about it?

    The responses we get from the President, the Vice President and their staffs and their mouthpieces are not very reassuring. The White House seems intent on preventing the committee from obtaining witnesses, documents, videotapes and a host of other evidence that we have subpoenaed as much as a year ago.

    High-paid officials who work in the White House insist that the delays in promoting and producing documents and videotapes have been inadvertent. But the pattern over the past year is deeply troubling, and we saw the same behavior in Travelgate, in Filegate, all of which was investigated by this committee, and all the rest of the efforts of any other committee in the House.

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    On nearly every front, we have witnesses in all of these scandals, and we have had massive outbreaks of these witnesses of something known as amnesia, sudden urges for extended travel abroad, temporary blindness whenever file drawers are opened; and a deep aversion to prompt and full compliance with legitimate, lawful requests for information.

    Mr. Chairman, I believe every member of this committee, regardless of party, should be troubled by the foot-dragging and the game-playing that has met this effort at every single turn. I think every Member of Congress, regardless of party, should be troubled.

    I know for a fact that millions of Americans are troubled about this. I do not know if it is possible to get at the truth in this matter, but at least we are trying to get at the truth.

    Our democracy rests on the strong foundation of the law. If the law is broken or even bent, then our democracy is undermined. The American people deserve to know, when this happens, what is being done to restore confidence in the laws that protect us all.

    That is the job we begin today. And I thank you, Mr. Chairman, for your leadership in this matter.

    Mr. BURTON. Does the gentleman yield back the balance of his time?

    Mr. HORN. Yes.

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    Mr. BURTON. We have about 9 minutes before this vote is concluded. Is there anyone who wants—Mr. Kucinich would you like to go ahead—excuse me, Ms. Norton, would you like to go ahead and make your statement?

    Ms. NORTON. Yes, Mr. Chairman. I have what I think will be a short statement.

    This hearing, for me, has an inevitable context, and that context is yesterday's vote in the Senate. And the reason it has that context for me is that I am remedy-oriented and not hearing-oriented.

    All 45 Democrats voted for cloture, only 8 Republicans did, on the McCain-Feingold bill. And we know that that bill has a number of controversial aspects, and yet there was a majority view in the Senate that we simply had to move forward and it didn't happen as the bill was pulled.

    Senator Thompson, who voted for the bill, indicated that he thought nothing would ever happen there because of the rules and procedures of the Senate.

    In effect, that says to me it is up to us. It will take the leadership of the House and, therefore, of this committee, to make anything happen on campaign finance reform.

    This is not a sideshow or entertainment for the television cameras who have come. It is a legislative hearing. There is much about our investigation, thus far, that has bothered me. I am bothered by the redundancy of much of the investigation. I am bothered by the partisanship of our proceedings. I am bothered by the new practices that involve unilateral dealings in subpoenas and the like.
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    At the same time, I cannot become an apologist even for the White House or for a President, who I think has done more for the economy of this country than any administration in memory; and I think the committee has a right to inquire about witnesses who flee or money that is returned and the like.

    I even think that if I were Attorney General of the United States, I would want to come either before this committee or before the Senate to explain why matters like illegal contributions or late-discovered tapes are not cause for a Special Prosecutor. In fact, I believe there is vast confusion, especially among Members of our two bodies, as to what the law actually requires, why it is tightly circumscribed; and I think you always do best by coming forward and explaining yourself.

    The saddest comment on hearings that have gone on here and in the Senate for almost a year is the public apathy. And I think you have to face why there is apathy when otherwise hair-raising notions are brought forward, albeit without evidence; and I think the reason for the apathy is the partnership that is—is that partisanship encourages cynicism in the republic—in the public, cynicism that for the polity and for politics is a danger to both sides.

    I think that our mission and our test is to see if we can, in fact, dispose of this apathy.

    For me, there is one question and only one question to be solved by these hearings. As much as I am intrigued by whodunits, that is not the question for me. I do want to know the answer, but I do not believe that that is how we will be judged.
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    The question, for me, that these hearings must answer is, did we, at the end of the day, contribute to remedies for these practices, whether they were illegal or not?

    The question, for me, at the end of the day is, what concrete happened as a result of these hearings? I want to make sure that this committee and this House makes something happen, since I believe that Mr. Thompson has spoken for the Senate when he says that nothing will happen as a result of what that body does.

    The burden is on us, Mr. Chairman, and I yield back the balance of my time.

    Mr. BURTON. The gentlelady yields back the balance of her time.

    We will recess until 2:30 p.m., so everyone can get lunch. We will stand in recess.


    Mr. BURTON. The committee will come to order. I think the last speaker was on the Republican side, so we will go to Mr. Cummings.

    Mr. CUMMINGS. Thank you very much, Mr. Chairman. Let me just say at the onset that I welcome these hearings, and I believe that they are long overdue. I welcome the start of these hearings not only for the fact that I believe some legitimate campaign fund-raising violations may have occurred, but also for the fact that this committee has wasted millions of dollars during unprecedented delays and disorganization.
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    Also I want to state that this committee should have conducted bicameral hearings with the Senate. I commend my colleagues on this side of the aisle, Mr. Condit and Mr. Towns, for calling for a joint House-Senate hearing, because it is the American taxpayer who suffers in wasted money and energy.

    My constituents sent me to Washington to allocate their dollars in a prudent manner. We must be cost-efficient and effective. It is my hope this committee will conduct balanced and fair investigations that will produce answers rather than more controversy. While that is my hope, when I consider the fact that the lead counsel for the Republicans has already quit, the former lead counsel, and said that he does not believe that we are proceeding in a fair way, it does concern me. By the way, that was not from the Washington Post, it was not from some newspaper, that is from a Republican who was on the inside conducting the investigation.

    The investigation should help us reform our troubled campaign finance system. Instead, the investigation is proving to be a partisan waste of taxpayer money. I do become rather offended when allegations are made on the other side that we on the Democratic side are not about the business or not concerned about the business of finding the truth. Nothing could be further from the truth. The fact is that we are very concerned, but our concern goes to trying to make sure that we do not, first of all, waste taxpayers' money; second of all, that we do everything in our power to be efficient, to resolve this matter, and for it to have some kind of results that make sense. At the rate we are going, it does not appear that that will happen.

    Over the last 8 months, the majority staff members have hauled in numerous individuals and engaged in a fishing expedition in a frantic attempt to find anything that tends to embarrass President Clinton. I have personally attended some of these inquisitions and seen these abuses.
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    One of the depositions that I attended was that of Vernon Jordan, one of this country's most outstanding and honorable people. Mr. Jordan was interrogated for hours, even though he had not the slightest involvement in campaign finance.

    Not only have my Republican colleagues not attended a single deposition, they have continued to deny the American public access to these depositions. The American public should know that the majority has devoted millions of dollars of their hard-earned money, and I emphasize that, their hard-earned money, and they do not have much to show for it.

    The hearing that we will hold tomorrow is a sad attempt to portray a foreign government or foreign citizens to influence our last Presidential election. From what I understand, we will hear nothing of the kind from these witnesses. Yet, this is the best can do after 8 months and millions of dollars spent.

    Mr. Chairman, the House is supposed to be equal to the Senate, yet this fiasco makes us look like amateurs compared to the Senate, which has put on many weeks of substantive hearings and now is winding down.

    Mr. Chairman, I know the American people expect more. We can do better.

    Thank you very much. I yield back the balance of my time.

    [The prepared statement of Hon. Elijah E. Cummings follows:]

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    Mr. BURTON. The gentleman yields back the balance of his time.

    Mr. Mica.

    Mr. MICA. Thank you, Mr. Chairman. The Government Reform and Oversight Committee is charged with the responsibility of conducting investigations, oversight, and the auditing of the performance of the executive and judicial branches of our Federal Government. This additional check, over and above actions taken by legislative and appropriations committees, was established by our Government's founders nearly 2 centuries ago, and is truly unique among all democratic institutions.

    I believe that this separate investigative committee oversight, which constantly reviews and scrutinizes all our Federal Government activities, is what keeps us from being a banana republic. It is fundamental to keeping our institutions honest, efficiently operated, and responsive to law. I believe that in the long term, it keeps our system and operation of Government from becoming corrupt, inept, and self-destructive.

    To those who question the need to conduct these investigative hearings, I ask them only to review the purpose, history, and achievements of this committee in helping to keep our Government honest and always subject to improvement. Yes, there are costs involved in this process, but I also submit that under this new majority, this committee is operating with fewer staff and far less cost than expended by the previous majority.

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    I would like to offer exhibits for the record since cost has become an issue here. Just for the record, and this information is from the Clerk, during the 105th Congress we have appropriated $11,702,000. During the 103d Congress, when they were in charge, for a 2-year period they spent $24,823,000. Last Congress for both years, we spent $11,581,000. So the cost is a bogus argument, and the record and the facts speak for themselves.

    Also the number of staff that are used—I would like to ask unanimous consent that exhibit 1, the costs, and exhibit 2, be inserted in the record.

    [The information referred to follows:]


    Mr. MICA. They had far greater staff and resources than we have used to conduct these responsibilities and investigations.

    To those who question the further need to investigate this growing campaign scandal, I must submit that nearly every week the media discloses another sordid chapter for our committee to consider.

    Now to the fundamental question of why we are conducting this investigation. Many existing laws have been broken, the application of certain laws has been questioned, and this scandal may, in fact, be unprecedented in scale, not to mention the shadow it has cast over our electoral process and over this administration.

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    Some of my colleagues on the other side of the aisle contend that this committee's investigation into the 1996 election campaign finance violations should not take place. I submit that the very foundations of our electorial process and integrity of our representative form of government may have been compromised.

    What laws have been broken? Let me cite a few examples, and I have here copies of our Federal statutes. First we know that there were violations under Title 2 United States Code 441. This statute prohibits contributions in the name of another person. We have obtained documented evidence that donors were reimbursed for contributions in both the Buddhist Temple case and in the Michael Brown pleadings.

    Witnesses tomorrow will testify under a grant of immunity that they made conduit payments. These payments, too, are prohibited under this statute.

    Does this statute work? Does this statute need revision? What went wrong? In May, Democratic fund-raisers Nora and Gene Lum pled guilty to a felony charge that they conspired to defraud the United States and to cause the submission of false statements to the Federal Elections Commission. These are criminal acts in violation of Title 18 United States Code, sections 371 and 1001. The Lums were recently sentenced, and the Lums have tentatively agreed to cooperate with this committee.

    Michael Brown recently pled guilty to violating section 441 and section 437 of the Federal Elections Campaign Act, another violation of law. These provisions of law limit the amount of money a person can contribute to a Federal candidate in an election. The funds for these illegal activities were provided to Brown by Nora and Gene Lum. We will hear more about that. Brown will be sentenced for these unlawful contributions in November.
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    The committee also has evidence that suggests during the 1996 election, John Huang may have illegally solicited campaign contributions at the Democratic National Committee while still a Federal employee at the Department of Commerce. This would be a violation of the Hatch Act.

    Violations and interpretation of the 114-year old Pendleton Act, which prohibits soliciting campaign contributions on Federal property, also raise significant questions for this committee.

    Violations of current law are already well-known and documented. I have only cited a few here, and we have run out of space, but these are just a few of the laws that we know have been broken.

    The circumstances of the White House coffees, the Lincoln bedroom sleepovers, and possible campaign fund-raising calls from the White House may have violated Title 18 United States Code, sections 600, 607, and 641 by compromising Government access in return for campaign contributions, by soliciting campaign contributions in a Federal building, and converting Federal property, the White House, to private use.

    The bribery statute, Title 18 of the United States Code, Section 201, which prohibits Federal officials, including the President, from receiving any benefit in return for any official action, may have also been violated. In fact, we have numerous laws on the books that may have been violated.

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    Our questions in these hearings must be: Do these laws work? What went wrong? And, how do we improve them? Those are the questions, and determining the facts and truth must be the responsibility of this committee.

    Finally, what is particularly troubling to me is the failure to cooperate, the stonewalling, the attempted blurring and obstructions that have been created to stop this legitimate oversight function, not to mention that 11 witnesses with information relative to the 1996 campaign scandal have fled the country, another 11 witnesses have refused to be interviewed by investigative bodies, and 36 Senate and House witnesses have asserted the fifth amendment. What has happened; what is being covered up; and why haven't the President and this administration, the Departments of Justice and State, helped us locate these folks?

    In closing, Mr. Chairman, the committee has evidence that strongly suggests that laws were broken in 1996. We are now learning that the whole electoral process may have been purposefully subverted. We need to conduct these hearings to learn what laws were broken, if these laws are adequate, if the system is broken, and to ensure that corrective measures are taken and responsibility and accountability prevail.

    Thank you, Mr. Chairman.

    Mr. BURTON. The gentleman's time has expired.

    Mr. MICA. I yield back the balance of my time.

    Mr. BURTON. You yielded your time a long time ago.
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    Mr. Towns.

    Mr. TOWNS. Thank you very much, Mr. Chairman. I would like to use the same clock that Mr. Mica used.

    Mr. BURTON. Let me just say—reset the clock, Mr. Towns. Let me just say I really would appreciate it if we could stick as close to the 5-minute rule as possible. I have been as lenient as I can be, but since we have 44 Members on the committee, 43 that are here, we really do have some time problems. Let's stick as close to the 5-minute rule as we can. I will try to be as lenient as I can.

    Mr. TOWNS. Thank you, Mr. Chairman. I will try and cooperate.

    I unequivocally support a thorough and comprehensive investigation into alleged campaign finance abuses of all individuals, and I want to make that very clear.

    When I took that sacred oath 10 months ago, I pledged, as I have for eight successive terms, to uphold the law and to advocate on behalf of our fellow Americans.

    Well, since that time, I have spoken to and I have listened to our constituents, and I can say without any reservations whatsoever that they are tired of partisan bickering. As hard-working Americans confront and resolve the problems of their lives, I believe they would like to see us similarly dedicate ourselves to problem-solving instead of personality slandering.
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    So, I come to you today as someone with institutional history. I have witnessed the outcomes of numerous investigations, and I urge my colleagues on both sides of the aisle to pause just for a moment, just one moment, from the haste to bring skeletons out of the closet and to beat the other guy to the punch and ask yourself what is our obligation to the American people, the folks that sent us here? What is our mission? Is our purpose to bring about true campaign reform, or are we simply concerned with focusing on certain individuals?

    If the answer is, as I truly hope, that our obligation is true reform, then we must be fair, and we must be honest and work in the interests of our constituents. We must look beyond partisan differences.

    We are approximately 1 month away from a recess. As the lenses of the American public are upon us, the committee is clearly out of focus. There has been request upon request and request for request. For instance, there has been 554 requests for information, 298 subpoenas, 134 document requests. 685,000 pieces of paper have already been generated, and at least $2 million has been spent at the Department of Commerce alone, not thinking about the other agencies that are involved in it.

    Has any of this brought us any closer to accomplishing campaign finance reform? The answer to that is no. We now find ourselves in this precarious position of beginning hearings when most of us are still trying to determine the real issues. It is not fair to these subpoenaed witnesses, Manlin Foung, Joseph Landon, and David Wang. It is not fair to the public. In a democracy, it is usually the will of the people that determines determinant is a course of action. That has not happened during this investigation.
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    Please do not misunderstand me. Let me be clear. I, like most of my Democratic colleagues, am ready to roll up my sleeves and get to work on one of the most challenging issues facing this body. But this cannot and will not happen until there is real dialog between both sides of the aisle, not this upmanship thing that is going on.

    At the end of the day, we must ask ourselves how we want to be remembered. I hope that we can say unequivocally that we were fair, that we were honest, and we were equitable in our treatment of all individuals involved.

    Let me close, Mr. Chairman, by saying, I still feel that we are wasting taxpayer dollars by not having a joint hearing with the Senate. It is a shame, and it is a disgrace. When I look at people that are going hungry in this country, people that have no shelter in this country, and that people cannot get medical care in this country, and many of our rural areas and urban areas in this Nation, and we are sitting here wasting taxpayer dollars, I think it

is something we should think very seriously about.

    At this time, Mr. Chairman, I yield back my time.

    Mr. BURTON. I thank the gentleman for sticking close to his 5 minutes.

    [The prepared statement of Hon. Edolphus Towns follows:]
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    Mr. BURTON. The gentleman yields back the balance of his time.

    Mr. Davis.

    Mr. DAVIS OF VIRGINIA. Mr. Chairman, I would like to commend you for holding these important hearings on the investigation into campaign finance improprieties and possible violations of law. It would be nice if we could hold joint hearings with the Senate, but as you know, under Senate rules, that committee disappears in a month, and with us just receiving information on videotapes and the stonewalling of releasing other information, that, unfortunately, makes it impossible.

    Also if the Attorney General had appointed a Special Prosecutor and were looking into these investigations, our oversight responsibilities would be different. Unfortunately, that is not the case.

    This committee is charged by the House of Representatives with general oversight responsibilities, which include the duty to conduct investigations of this nature, and there is a long history of doing that. The revelations of campaign fund-raising abuse, which began to trickle out just prior to the 1996 elections, have raised serious questions as to the practices employed during the 1996 election cycle, especially by the Democratic National Committee and the President's re-election campaign.

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    We are all familiar with the reports of White House coffees, overnights in the Lincoln bedroom, and the campaign events held by nonprofit organizations. Having begun as an investigation propelled by the press, the campaign fund-raising controversy and investigation has now been elevated to the Congress, both House and Senate, as well as to the Justice Department.

    The ultimate goal of these hearings is to get at the truth behind what happened during the 1996 election cycle, no matter where the truth may lead. I believe it is important for the American people to know how their political leaders financed their campaign and whether or not any campaign finance laws were broken. This committee, in conjunction with the Senate committee and the Department of Justice, can serve to shed the light of truth on questionable fund-raising practices.

    It is extremely disturbing to consider the possibility of foreign dollars being purposely used in an attempt to influence the policies of the U.S. Government. Along that vein, however, I feel compelled to caution against the broad allegations of linking Americans of Asian descent to this controversy. This is not a controversy limited to Asian Americans. The Asian American community is in reality a shining example of the American dream. We must not allow this controversy surrounding its 1996 elections to discourage Americans of any ethnic origin from participating in the political discourse of this Nation fully.

    Having said that, I encourage any party interested in the truth to focus on what others have said about the validity of this investigation. In stark contrast to the President's own statements offering full cooperation with any investigation, the administration has instead been stonewalling this committee's attempts to review the elections of 1996. Again, this is not the committee's perspective or my perspective, but the assertions of numerous editorials in the Washington Post and the New York Times.
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    The Washington Post had this to say about the administration's handling of the inconvenient facts surrounding the investigation: It puts up a false front, offers a misleading version of events. If and when that fails, as often occurs, it puts up another and another, as many as it takes. Then administration officials bemoan the cynicism with which they are often greeted with and wonder aloud, or pretend to wonder, why they are not believed. The dispensing of truth in reluctant dribs and drabs does indeed have the corrosive effect the White House itself periodically deplores.

    That is the Washington Post in January.

    A few days later, the White House itself would play dumb, claim not to have known anything about the episode, whatever it was, and then, confronted with evidence to the contrary, would dole out the truth a grudging grain at a time, when it spoke the truth at all.

    April 3d, the Washington Post. They, the White House, put out a story that may or may not be technically true, but creates a false impression. They benefit from that impression, which is allowed to stand for as long as it serves, meaning until it is shot down or about to be shot down.

    The New York Times also questions the integrity of this administration's willingness to cooperate with a review of fund-raising practices. One editorial, entitled, ''An Instinct to Deceive: What will it take to persuade the White House to tell the truth simply and promptly once a scandal is brewing?'' Apparently not even the advice of two lawyers of uncontested loyalty to President Clinton can overcome the cover-up instinct that has made a quagmire of Whitewater and is turning the Indonesian fund-raising affair into a matter that neither Congress nor the attorney can ignore.
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    That is November 20. On July 3d of this year, the New York Times says, the pattern here is familiar. New information keeps dripping out while the White House argues that the investigations into the Clinton finances have gone on too long.

    This investigation is not just a case of the Congress being interested in the fund-raising practices employed during the 1996 election cycle for partisan gain. This is an investigation that is being driven by careless disrespect for our Nation's current fund-raising laws and by the inability of the parties involved to simply comply with the judicious review of the events surrounding the 1996 elections.

    The New York Times has even gone so far as to call the Clinton-Gore re-election campaign the most reckless Presidential fund-raising operation in recent history, July 17, 1997.

    I personally hope this is not true. So far, however, the White House and the DNC have acted in a manner that would lead us to agree with the New York Times. If the White House would have us believe that improprieties were confined to a limited number of individuals, the administration must be more forthcoming.

    The first hearings will focus on legitimate issues surrounding the apparent laundering of campaign funds through third parties. The use of conduits for illegal contributions may, however, just be a small part of a larger picture surrounding the 1996 elections.

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    This committee, in the absence of an Independent Counsel on this matter, must continue to ask the question, who knew what, and when did they know it?

    Again, this is not just the view of this committee. Look at what others have said about this controversy. The New York Times, July 24: The documents also show the DNC's clear disdain for laws limiting contributions to candidates as opposed to political parties.

    They also said it was, in short, laundered money. More troubling still is the possibility that the White House did know. That was July 31st New York Times.

    It is my belief that the statutory requirements needed to activate the Independent Counsel statute have been triggered. It is incumbent upon the Attorney General to avoid any appearance of impropriety and to recognize the professional duty to call for independent review of fund-raising practices and the subsequent actions of involved parties, wherever they may be. The recent revelations surrounding the Vice President have only added fuel to the fire calling for an Independent Counsel.

    The New York Times has also recognized the growing concerns in regards to a potential conflict of interest on the part of the Justice Department.

    The Senate hearings, the New York said August 3d, have also yielded fresh evidence that the White House and the Democratic National Committee chose to look the other way as funds flowed illegally from foreign sources into the Clinton re-election campaign, greatly strengthening the case for an Independent Counsel to get to the bottom of the entire mess.

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    On September 14th, the New York Times says, recent weeks have brought fresh evidence that the Democrats' Justice investigators are either lethargic or over their heads. Even worse, Attorney General Janet Reno's failure to seek an Independent Counsel to oversee the probe no longer looks like a principled assertion of faith in Justice's career staff. It looks like a political blocking operation to protect President Clinton and Mr. Gore from the vigorous investigation that would be aimed at any other officeholder who has received so much suspicious money.

    The Washington Post, October 8th, and now the White House has found and turned over to congressional investigators videotapes of some of the coffees the President gave for campaign contributors last year. There may be tapes of as many as 150 such events. The investigators asked for them months ago. Only now are they being disinterred. It is enough to give good faith a bad name. The attitude of this White House toward the truth whenever it is in trouble is the same: Don't tell it, or tell only as much as you absolutely must or as helps. They keep asking indignantly, even a little petulantly over there, why they are not believed as they keep putting out their successive versions of the story. Can anyone really believe that they don't have the answer to that? Can anyone believe this is on the up and up?

    I remain hopeful the Attorney General will trigger the Independent Counsel statute and that this controversy can be completely taken out of the political realm. But until such time as the administration's stonewalling should stop, and as the editorial I have quoted from the New York Times and Washington Post that I quoted earlier make clear, the White House has come perilously close to obstruction of justice, and this should stop. The sooner we get the facts out, the sooner we can resolve this matter, and the sooner we can put it behind us.

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    Thank you, Mr. Chairman. I yield back.

    Mr. BURTON. Mr. Kucinich.

    Mr. KUCINICH. Thank you very much, Mr. Chairman and Members. I join with my fellows on this side of the aisle, as well as those on the other side of the aisle, in saying that law-breaking ought to be exposed and brought to justice. It is our duty. The Bible says, you shall know the truth, and the truth shall set you free.

    From the beginning of this investigation, I have wished that this committee could work in a relatively bipartisan manner that our counterparts with the Thompson committee in the Senate have done, and that we not duplicate efforts undertaken by the Senate, and that we be respectful of taxpayers' dollars in the process. Unfortunately, none of my wishes have yet come true. After more than $2.5 million of taxpayer money has been spent, mostly by the majority of this committee, after numerous depositions were taken at the initiative of the majority, without, I might say, a significant yield, after numerous hearings have been scheduled and then postponed, after almost all the committee action has been decided unilaterally and solely on the basis of the majority's wishes, and after the document protocols negotiated by Mr. Chairman and agreed to by the minority were scuttled, I arrive at this moment with some degree of skepticism.

    I have read the New York Times and Washington Post editorials that have been cited. I have also read the New York Times and Washington Post editorials which cite the problems I have just articulated with the committee process itself.

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    This committee's investigation is challenged to prove that it is more than partisan with respect to the investigation subject and in comparison with past investigations. The Watergate investigation was a bipartisan investigation. That is why it was successful. That is why it achieved a cleansing of the American political process.

    This is not in any way to dismiss the committee's right to investigate. As a member of this committee, I claim that right, and I share the claiming of that right by every other Member. But when we claim that right, we ought to be right in the way in which we proceed.

    Mr. Chairman and members of this committee, I come to the Congress with a background in speech and communications. I taught communications at Cleveland State University and Case- Western Reserve University, and therefore I am very sensitive to all manners of communication and the way in which communication is presented. I say that in this context: I watched the beginning of this committee's work earlier in the day, and I saw a presentation which disturbs me greatly, because it raises questions as to matters of fairness.

    I want to say I believe that Mr. Chairman is a fair person, I sincerely believe that. But there was a presentation put together here which I don't believe was fair. The presentation where we saw the image of Mr. Huang appeared as a mug shot. It was grainy, it was somewhat smeared. I am sure that the gentleman who has been the subject of so much publicity, there would have been pictures available which could have presented him in a more dignified way, notwithstanding his actions. I ask whether that is fair?

    Is it fair to have pictures of Mr. Hubbell and President Clinton ''high-fiving'' each other flashed on that screen while at the same time discussing possible criminal violations?
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    Now, think about that. What that does is it sends out a message, certainly undignified and unfair, but it discolors the investigation by giving a false impression of complicity. The President of the United States ''high-fiving'' someone who is under investigation.

    We should not proceed with this investigation in a manner which smears people, which causes conclusions to be drawn by images that we put forward to the public. We can proceed in a manner which goes with the facts, to the facts. Otherwise we have discolored the investigation and created an Alice in Wonderland environment of first rendering a verdict and then asking for the evidence.

    Is it fair that another Asian businessman, Mr. Trie, when his picture was flashed on that screen, in violation of certain rules as Mr. Kanjorski said, but his picture was distorted and blurred in this TV presentation? The two Asian Americans were presented on the screen, and their pictures were blurred and distorted.

    Computer technology today is a wonderful thing. You can clear up a picture, you can distort a picture. You can switch heads with people. You can put a person in a picture who wasn't in that picture. We certainly could have a presentation, a picture that does not distort.

    Abraham Lincoln was quoted earlier with respect to finding the facts. I, too, would like to quote Abraham Lincoln when he looked at a moment of conflict in this Nation. He said, ''With malice toward none.'' We can proceed with this investigation without being malicious. We can get at the truth without trying to rip people to pieces. We need to keep in mind that there has to be a higher calling to our presence here, and that is to not just find out what was wrong, but to set what was wrong right through addressing a system that is inherently flawed. And until we are willing to do that, until we are willing to make that connection between the problems which are brought before us, yes, the breaking of the law which is brought before us, and a resolution of that through cleaning up the system, this whole matter would be an exercise in vain.
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    I thank the Chair.

    Mr. BURTON. The gentleman's time has expired. The gentleman from Indiana.

    Mr. SOUDER. Mr. Chairman, I have a parliamentary inquiry.

    Mr. BURTON. The gentleman will state his parliamentary inquiry.

    Mr. SOUDER. There was a discussion about the grainy pictures. My understanding from having done some of this on the floor and talked with the committee and others is it has been very difficult to get pictures of the President with the individuals or the Vice President with the individuals, or, for that matter, a picture of Mr. Huang, and all we have are newspaper photos, which come out grainy when we reprint them. Is that the case and is that why we used grainy photos?

    Mr. BURTON. The photos we used were from public sources. It was not intentional, that we strive to put them in a grainy mode.

    Mr. SOUDER. I thank the chairman.

    Mr. KUCINICH. Inquiry to the Chair.

    Mr. BURTON. The gentleman will state his inquiry.
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    Mr. KUCINICH. I understand the Chair has a wonderful background in public service, but I would suggest, Mr. Chairman, and to my dear colleague, that as we proceed, that care be taken in these matters so as not to leave a mistaken impression that we are trying to achieve something one way through images that we would not dare to try to achieve through our rhetoric.

    Mr. BURTON. The gentleman's point is well taken. We will do our best to make sure we show fairness whenever we show a photo of anybody under investigation.

    The gentleman from Indiana.

    Mr. SOUDER. Mr. Chairman, I look forward to this much anticipated inauguration of this important committee investigation and to hearing from our first witnesses tomorrow. The White House has hoped to deceive the public into believing that everyone breaks the law. The President waxes piously about the need for an overall overhaul of campaign finance laws, the moral equivalent of a bank robber who, once apprehended, touts himself as an expert on banking reform.

    Rule No. 1 is follow the current law. Our oversight function in this committee is not campaign finance reform. It is to find if current laws were broken by this administration and why. We have oversight over this administration and its agencies.

    Then, if we find that these are requiring new laws, then new laws arise out of that. But first you have to do the investigation.
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    I didn't see a lot of Members from the other party during Watergate suggesting they investigate past administrations; for example, President Johnson's bugging of Barry Goldwater and the cover-up after that.

    The goal of the oversight committee is to look into the oversight of the current administration, and what we see on the surface is an abuse that looks overwhelming: Overnights at the Lincoln bedroom, coffee klatches, hard money, soft money, Citizenship USA, the Pendleton Act, the Hatch Act, Buddhist Temples, photo ops with felons, Roger Tamraz and Interpol, Nora and Gene Lum, the Teamsters and DNC, conduit payments, money laundering and videotapes.

    It is hard to keep track of all the Byzantine dimensions of this problem.

    As we look at the recent things and problems, such as the memory recall problem of the DNC chairman and the missing videotapes of the coffee klatches, allegedly misfiled under Democratic fund-raising, they raise the questions of obstruction of justice and conspiracy to mislead congressional investigators. And for those who would try to compare this to the conduct of any previous administration, Republican or Democrat, please, don't even try. This is much more comprehensive.

    We should be, unlike the Attorney General, who now appears to be regelated to serving as the President's defense counsel, and has declined repeatedly to appoint an Independent Counsel as the law requires, investigating the burgeoning fund-raising scandals, regardless of what she does, because she has now put the task to us, unless she will appoint the independent counsel.
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    We have some very critical questions. Did a foreign government or governments, through agents of influence, succeed in buying access to the Oval Office, and did this penetration compromise U.S. security?

    Never before in the history of this country has Congress been presented with a scandal of such breathtaking magnitude, complexity and pervasiveness. Nearly every agency of Government appears to have been debased to some degree by the stench of political corruption.

    This committee's work has been nearly crippled by the remarkable disappearance of or lack of cooperation from 60 witnesses with firsthand knowledge of the fund-raising scandal. Like Colombian drug cartel leaders who boastfully call themselves unextraditables, many of Mr. Clinton's most generous donors and most energetic fund-raisers have spirited themselves away from American territory, to China, to Thailand, or back to Indonesia, beyond the reach of committee lawyers, subpoenas and depositions. And people want to know why it has taken us so long? They are fleeing our Nation, and they are obstructing our ability to do justice in the United States.

    Among those, John Huang, formerly of the Commerce Department and the Lippo Group. Mr. Huang has taken the fifth amendment. A memo by Mr. Huang, a prodigious fund-raiser for the President's re-election, showed his asking for over $153,000 in foreign money from Lippo Indonesia to be wired to his accounts at LippoBank, specifically earmarked for the DNC. The DNC pledged to return a $250,000 contribution from a South Korean businessman, which originated at Mr. Huang's suggestion.

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    Another key figure is Charlie Trie, a restaurant owner from Little Rock, AR, a friend of Bill's. Mr. Trie absconded from the country and is said to be in China. Mr. Trie made hundreds of thousands of dollars of illegal donations to the Democratic National Committee and delivered bags and envelopes full of small checks and money orders totaling nearly $800,000 to Clinton's legal defense fund. Some money orders were numbered sequentially, although they ostensibly came from individuals in different States who shared the same surname. Trie was awarded with appointment to the President's Commission on U.S. Pacific Trade and Investment Policy, which further gave him credibility and clout.

    We already know the Trie donations coincided with a letter faxed to the President urging restraint in responding to China's military exercises off the Taiwanese coast prior to its first democratic elections.

    Finally, there is Johnny Chung, a political operative known best for his apt quotation comparing the White House to a subway station. ''You have to put coins in to open the gate.'' Mr. Chung vows his contributions were solicited by the DNC finance director Richard Sullivan, despite the fact that a National Security Council aide described him in a memorandum as a hustler trying to exploit his White House contacts. After the hustler memo, after the hustler memo, Chung was received 20 more times at the White House, for a total of 49 visits.

    The responsibility of this investigatory body is to find out what laws were broken; what, if any, breaches of national security occurred; and whether important policy compromises were made as a repayment for illicit campaign donations.

    I hope we can have a bipartisan effort. The Attorney General, the Nation's top enforcement officer, has shirked her constitutional responsibility. We cannot afford to shirk ours. Bipartisan cooperation requires both sides, not just one side, and I hope some Members on the other side have the courage, like Republicans did under Watergate as it unfolded, to step forward to help us in this investigation and getting the truth out, even if that means extradition and help from the State Department at some point.
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    Mr. BURTON. The gentleman yields back his time.

    Mr. Owens.

    Mr. OWENS. Mr. Chairman, I would like not to be redundant. I think that these hearings could be of great importance if we deal with the underlying issue and not allow them to become trivial. This is a vital life-and-death issue with respect to the survival of our democracy, the issue of how elections take place and who pays for what. The issue is, what is the influence of big money in our democracy?

    The issue is, how does laissez-faire work the other way? We have all been schooled in the doctrine of laissez-faire in terms of Government leaving the marketplace and the private sector alone, but we have never talked very much and there has not been very much discussion in colleges and universities about how you avoid having the marketplace and the private sector take over Government.

    Laissez-faire should work both ways, and the real underlying problem behind all the other details that we have been discussing in this hearing is the problem of our Government being for sale. Is our Government for sale and to what degree is it for sale?

    We have a Democrat in the White House who was determined that if he lost the election it wasn't going to be because he was outspent or it wasn't going to be for lack of money. Not only the Democrats in the White House, the President and the Vice President were preoccupied with money, but every Member of Congress.
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    We had numerous discussions about Democrats taking back the Congress and we had most of—a large part, portion of those discussions, related to money. No matter what the merits were, no matter what our positions were, you still had—had to have the money to get on television and buy the ads.

    Money begins to dominate the political process in America. That is the real issue. That is what the American people ought to take a close look at. The details can take us into trivialities sometimes that are quite laughable. I agree with Harold Ickes and Jay Leno, or whoever started it, who said that, you know, where did you expect the President and the Vice President to make their calls from? You know, they live in the White House. They live on Government property. That is their home.

    Every Member of Congress knows they can't avoid some discussion of fund-raising on Federal property. Even if you are so careful never to discuss it yourself on the phone, you are going to get phone calls from other people who are going to discuss it. Are you going to hang up on somebody because they call you to say something about a fund-raiser or a fund-raising process? No, you are not.

    We go off the Hill to make calls at the various headquarters for the parties. We also go home to make calls. We probably make a large number of calls at home. The home of the President, the home of the Vice President, is the White House and the other facilities that are provided for the Vice President. So it is a little ridiculous to single that out as being so important that it diverts us from the real issue of there is too much money required in American elections.
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    Campaign spending has increased exponentially, according to the Federal Election Commission. Spending in Federal elections has increased from $309.6 million in 1975–1976 to $2.738 billion in 1995–1996. At the same time the voter turnout is going down, the amount of money being spent is going up.

    Independent expenditures have greatly increased. Soft money, Republicans outraised Democrats in soft money in the 1996 election; $138.2 million to the Democrats, $123.9 million in soft money. That is double what the parties raised in 1991–1992. You know, tremendous amounts of money being raised; nobody is giving it away just because they are good Boy Scouts. There is a process which any sophomore in high school or college can tell you, a process of expecting something back in return for the money.

    The Presidents, throughout history, have always had various kinds of social activities in the White House. If we turn the microscope on any past Presidents recently, we are going to find the same kinds of things were done at the White House that we are blown up out of proportion here in terms of people being invited into the White House who have influence and who have various other kinds of things that the White House wants to get, whether it is the money or their influence in some respect.

    In terms of hard money, money spent by Republicans and Democrats, Republicans raised $416.5 million in 1996—for 1996 committee elections, while the Democrats raised $221.6 million. You know, tremendous amounts of money are going into these elections, and the question that should be on everybody's mind as we take them through the steps of these hearings and we talk to the witnesses and we reproduce and duplicate, replicate what the Senate has already done, the question should always be, you know, is this the kind of America we want, which is clearly an America where the political process is up for sale?
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    If nothing else comes out of this, it ought to be the—the searing on the imaginations and the minds of Americans of the fact that we are drifting into a situation where our democracy will inevitably be greatly distorted by the fact that you have these tremendous amounts of money that have to be raised.

    We must have campaign finance reform. Eighty-three percent of—85 percent of Americans think that special interest groups have more influence than the voters; 92 percent think too much money is spent on campaigns; almost 9 out of 10 Americans want fundamental change or a complete overhaul of the campaign finance system.

    Are we going to engage these questions in this hearing? Are we going to ask questions and do things with respect to the witnesses and the processes, as we go through this in this committee, which do in some way address this profound question? Is our Government for sale? Is our democracy in danger because it is being taken over by the private sector with large sums of money?

    The laissez-faire that we are so proud of with respect to Government not interfering with business is not going the other way. Business money is trying to dominate our Government, and that is the issue.

    I yield back the balance of my time.

    Mr. BURTON. Thank you, Mr. Owens.

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    Mr. Scarborough.

    Mr. SCARBOROUGH. Thank you, Mr. Chairman.

    I have found the speeches on the Democratic side to be entertaining at the very least, unfortunate in many.

    A gentleman a couple of speakers ago talked about how he longed for bipartisanship. Well, I long for the type of bipartisan also that was evident during the Watergate hearings when we actually had a Senator in the minority there to stand up and ask tough questions of the President: What did the President know and when did he know it?

    Regrettably, all we hear are the most frantic charges of—I have heard ''partisanship''; I have heard the word ''evil'' thrown around; I have heard ''a witch-hunt''; and I have also heard ''fishing expedition.'' We were told a few minutes ago that children were starving across America because of these hearings. We were told that people were freezing and homeless because of these hearings. It is demagoguery at its worst.

    It also amounts to a political obstruction of justice, and regrettably, we have seen this on this committee for some time.

    I remember when Chairman Clinger, a few years ago, tried to get some documents pertaining to Craig Livingstone. We were—the same terms were used, that it was a ''fishing expedition,'' that it was a ''witch-hunt.'' Later we found out, after this ''fishing expedition,'' after this so-called ''witch-hunt,'' that the White House had illegally and improperly seized 900 FBI files against their political enemies. And yet this continues. It is déjá vu all over again.
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    One Democrat has said we can do better. Well, I say the Democrats can do better, and I am going to make a plaque. It is going to be the Senator Joe Lieberman plaque for the first House Member that actually stands up and shows the courage that Senator Lieberman showed on the Democratic side and that Howard Baker showed so many years ago.

    This is what Senator Lieberman said on the Senate side, ''The pattern of behavior by the White House, as exemplified most recently in the question of these tapes, is unacceptable also. One can hear the explanation given that it is a foul-up and not a cover-up, but the accumulation of foul-ups begin to raise an understandable question in the minds of this committee, which is, 'What is going on over there and why does it happen?' ''

    That is Joe Lieberman, the one Democrat that has shown a little bit of courage over the past few months.

    This shouldn't be about partisanship, and I agree with the gentleman, if a Republican did this, I would hold the Republican to the same high standard that I would want to hold this President to. And if anybody doubts this, all they need to do is ask Newt Gingrich, Dick Armey or other Members of my leadership that I have given problems to over the past few months.

    You can also, if you think that this is about partisanship, that you think this is a Republican attack, all you have to do is read the newspapers to see what they are saying. Read what the Washington Post said yesterday when, in so many words, they accused the White House of lying. They said, ''The attitude of this White House toward the truth, whenever it is in trouble, is the same: Don't tell it, or tell only as much of it as you absolutely must.'' And then we, of course, had the New York Times last week, who editorialized on their editorial page that Bill Clinton and Janet Reno could no longer be trusted to look into the fund-raising abuses that have occurred.
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    We have had Newsweek going into it for a year now. They reported last year about possible espionage between a White House and DNC official and Communist China, explaining how this official would get briefings from the Commerce Department and then was stupid enough to step into a cab, take a cab to the Chinese Embassy and then turn in a receipt to get some money back. And this happened over and over again, according to Newsweek.

    We have had press reports that the CIA, that the FBI, that the INS, that the NSC, that possibly the IRS and obviously the office of the President, the office of the Vice President, have been involved to assist the White House, possibly illegally, to elect the President and Democrats to Congress. And it expands and it continues to expand, and all we hear is the same thing, ''witch-hunt,'' or that it is evil or that it is partisanship.

    There is nothing partisan about the New York Times. There is nothing partisan about the editorial page of the Washington Post. Of course, some of us would suggest that if there was any partisanship, it certainly would tilt heavily against the Republican party. But to those editorial pages' credit, they have had the moral courage to speak out against an administration that is perhaps had the most corrupt fund-raising machine in the history of this Republic.

    Why can't one Democrat—and I see we only have one Democrat, so I throw this offer over to you. I will get the Lieberman memorial plaque, give it to you after this hearing. Why can't we have one Democrat say, something stinks at the White House, something is very, very wrong; let's get to the bottom of it, and let's stop trying to change the subject?

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    I mean, if I hear one more Democrat say, well, this is a wonderful opportunity to re-examine campaign finance laws, that is like Marv Albert stepping out of the courthouse and saying, this is—I have provided us a wonderful opportunity to examine sexual harassment in America.

    I mean, let's stop trying to change the subject and instead get to the bottom of this issue, which is that this White House has continued illegally using its influence to get re-elected, to get Democrats re-elected. And after the end of that process then maybe we can look at campaign finance reform; then we can look at putting even more new laws on the books. But before we do that, I say, let's get a—let's get a White House and let's get Democrats that are willing to abide by the laws that we now have on the books.

    I yield back the balance of my time.

    Mr. BURTON. Thank you for that entertaining speech.

    Mr.—I want to get this right—Blagojevich, is that pretty close?

    Mr. BLAGOJEVICH. That is exactly on the mark, Mr. Chairman. Thank you.

    First of all, evidently, I am all alone here. I think my colleagues on this side knew I was going to speak and they left.

    Let me also say it was Mo Udall, I believe, who said that everything has been said, but not everybody has said it. I will probably do less than 5 minutes since so many Members on both sides have said a lot of the kinds of points I want to make.
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    And let me just briefly comment on my illustrious colleague from Florida, who I have again—and we hear this all the time—I genuinely have high regard for Mr. Scarborough from Florida. He made a statement that if a Republican did this, he would be—I think I am paraphrasing now—outraged or something to that extent.

    The fact of the matter is, this committee probably isn't going to find out whether or not Republicans did it or not because we are going after Democrats in this committee. Probably 9 out of 10 subpoenas that have been issued from this committee are earmarked toward Democrats and not Republicans. So I don't think my illustrious colleague from Florida will have the opportunity to be as outraged about a Republican.

    And I think when I quoted Mo Udall about saying the same things that others have said, I am going to repeat what virtually everybody on this committee in both parties has said. It is that we think that we ought to have an investigation, that many of these allegations are not only troubling, but potentially criminal in nature and that this investigation is important; that we have to find out what actually happened, particularly with regard to fund-raising in the White House.

    There are, however, differences. Those of us here happen to think that we ought to not only investigate the White House, we ought to investigate the House, we ought to investigate Democrats and Republicans, because when I go back home to my district—and I have been back every weekend since I have been elected with the exception of one—and when I appear at town hall meetings or community forums, I don't hear a single question, not a single question about campaign misdeeds in the White House or in Congress.
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    And when I sometimes ask questions, because I want to have a sense of what people are concerned about, I get—I get a sense from the people back home that they just view this whole process as corrupt or corrupting. They view this whole process as ugly and dirty, and they think that we are all politicians just trying to raise money and that any excesses and transgressions that may have come out of the White House are just business as usual in Washington, DC, and in politics in general.

    I must say that I don't necessarily disagree with them. In fact, these allegations about whether or not big money is in the system, allegations about whether or not fund-raising and contributors buy access to Government is kind of reminiscent of the movie Casablanca, the scene where the Paul Henreid character, they are in Rick's Cafe, if you remember the movie, and they all start playing the Marseillaise; and it is a very moving scene, one of the great scenes in movie history. And then when it is all over, the German officer is there and he tells the Vichy representative, who was played by Claude Raines, the Captain Renaud character, shut it down, shut down Rick's Cafe. So he goes up to the Humphrey Bogart character and he says, ''Rick, you know, we are closing this place down.'' And Humphrey Bogart says to him, ''what are you closing me down for, what are the grounds?'' And the Claude Raines character in the classic line says, ''Rick, I am shocked, I am shocked. There is gambling here.''

    He had just placed a bet earlier in the movie.

    The fact is that a lot of these allegations are not shocking at all. They are, in fact, a problem with the system, endemic to a system that needs reform.

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    I hate to disappoint my colleague from Florida, but if these investigations are going to have any merit at all, if we are going to learn anything from what we hopefully are going to discover from these investigations, I think it is only good to underscore what we already know, which is the system doesn't work. It is a system that is corrupting or corruptible, and it is a system that needs fundamental reform.

    And I am joined by many other Members who are willing to stay in this session beyond adjournment unless—for as long as it takes to pass some kind of campaign finance reform in this Congress.

    And let me also say that there is a bipartisan effort, Republicans and Democrats alike, whether it is McCain-Feingold or the freshman version of—Republican freshmen and Democratic freshmen offering some kind of meaningful campaign finance reform.

    In the post-Watergate era, Congress changed the rules and they did it because the American people clamored for it. And I believe that unless and until the American people feel that we are going to do something about cleaning up a system that has gone wrong, they are not going to tune us in and they are not going to be as willing to respond to some of the allegations that arguably are very, very serious.

    So I hope we can have campaign finance reform, Mr. Chairman, as we continue this investigation. And I yield back the balance of my time.

    Mr. BURTON. Your statements on Casablanca were very accurate.

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    Mr. BLAGOJEVICH. Thank you.

    Mr. BURTON. Mr. Shadegg.

    Mr. SHADEGG. Thank you, Mr. Chairman.

    Before I begin, let me note for my colleague on the other side, eight out of the nine subpoenas issued by this committee may be directed to Democrats largely because eight out of nine of the articles that appear in the Washington Post, the New York Times, the L.A. Times and virtually every other newspaper in this country, where there are investigative reporters at work, focus on abuses and violations of law by Democrats. So I think it is quite logical.

    Mr. Chairman, make no mistake about it, this investigation and these hearings go to the very heart of the survival of this Nation. While I do not wish to raise expectations about the nature of the information that will come out of these hearings, the essence of the hearings addresses the integrity of our system of Government, and the faith, confidence and respect it commands from the people of this Nation.

    If the people do not believe that our Government is honest, their motivation to abide by its laws will be destroyed. In our system of Government, order is maintained by voluntary compliance with law. If that compliance is abandoned, anarchy will prevail. If the people believe our Government is corrupt, liberty will not survive.

    Again, let me make it absolutely clear. Whether we produce shocking evidence, proving violations of the law occurred or not, the issue is maintaining credibility within our system of Government. The evidence which is already in the public domain suggests that our campaign finance laws were abused and corrupted to an unprecedented degree in the 1996 election.
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    Sadly, this process has become hopelessly partisan. An immense effort has been and is being expended in trying to prevent the truth from coming out. And when evidence is brought out, every effort is made to minimize its significance to the greatest extent possible.

    The subject of these hearings is not new to me. For 8 years, I served as special assistant to the Arizona attorney general. In that capacity, I was specifically responsible for enforcing Arizona's campaign finance laws. During that time, there were two major revisions of our campaign finance laws, which produced some of the strictest and most rigid campaign laws in the Nation.

    In both cases, proponents of the reforms claimed that with these radical new limits, the cost of campaigning would decrease. Time has shown, however, that not only did the cost of political campaigns in Arizona not go down, but in fact, it has increased. But more importantly, these so-called ''reforms'' drove a large portion of campaign spending underground.

    Prior to the changes in our law, it was easy to determine where campaign contributions came from and where they went. Regrettably, following reform, this information is almost impossible to ascertain. For example, there are now countless nice sounding organizations that act as fronts for the very special interest groups the law was intended to affect. Just one such organization, called Citizens for Excellence in Education, was nothing more, as many of them are nothing more, than a front for another organization—in this case, the Arizona Education Association from which it obtained all of its funding.

    In light of my personal campaign—experience with campaign finance laws, I am greatly disturbed, indeed I am disgusted, by the concerted effort of the current administration and of some members of this committee to do everything possible to prevent this investigation from moving forward. Over and over again, to date, they have constructed roadblock after roadblock to obstruct this investigation.
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    To thwart our effort, the White House has stonewalled repeated requests for information, concealed other information and produced yet still more information only after the committee threatened contempt of Congress.

    Conversely, the administration has also engaged in a calculated effort to time the release of the information which the administration considers damaging so as to diminish its significance when brought forward by this committee in the course of these hearings. Just a week ago, there was an effort to force the release of committee depositions the moment they were taken. The obvious motive for that effort was to make any significant revelations at such a deposition old news and, therefore, insignificant when the committee hearing focused on that witness and the information the witness had produced.

    The recent release of videotapes of the White House coffees is yet the latest example of foot-dragging and obfuscation by the White House. From the time these coffees came to light earlier this year, the White House spin operation denied that they were fund-raisers. Yet, when administration officials searched the White House videotape data base for coffees, they found only 49 hits. By contrast, when they recently searched for DNC fund-raisers, there were 150 hits. This, I suggest, is a stunning revelation that these events were viewed as political fund-raisers by the White House itself.

    And based on the audio from these now-revealed tapes, the people attending them obviously understood they were fund-raising events, with one attendant audibly offering checks to a DNC official in the room.

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    As the Senate hearings have shown and as these hearings will show, there is one riveting fact this administration cannot escape; and that is, the information we have already seen demonstrates that the abuses in which they were engaged and which have already come to light were in violation of current law. If current law had been followed or if it were currently being enforced, this investigation would not be necessary.

    For my colleagues on the other side who complain about the cost of this investigation, they should be reminded that it was the improper actions of the President, the White House and the DNC that created any additional burden to taxpayers for the cost of these hearings.

    Our job as members of this committee is to oversee the executive branch of this Government. It would be irresponsible for any of us to turn a blind eye to the blatant disregard for campaign finance laws as occurred in the last election cycle. As I said earlier, disregard of existing law, as some would suggest has been flagrantly demonstrated by this administration, erodes the public confidence and trust, which is essential to our survival as a Nation.

    As Thomas Jefferson said, the whole art of Government consists in the art of being honest.

    Mr. President, we simply ask that you be honest.

    Let me conclude, Mr. Chairman, by noting that the appointment of a Special Prosecutor is long overdue. The latest refusal of Attorney General Janet Reno, which was followed only hours later by the release of the White House videotapes, establishes beyond a doubt that the Attorney General and the Department of Justice are not doing their job.
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    More importantly, not only is Janet Reno not doing her job, she is showing contempt for the law and destroying public confidence and faith in our system of Government.

    Mr. Chairman, I close with a plea to everyone involved in this process, from the White House to the Attorney General and the Department of Justice, to the members of this committee, to do what is right, proper and honest. The future of our Nation is at stake.

    Mr. BURTON. Thank you.

    Mr. Davis.

    Mr. DAVIS OF ILLINOIS. Thank you very much, Mr. Chairman.

    We gather here today, 9 months after the initial investigation of allegations of finance campaign abuses from the 1996 election cycle, $2.5 million of the taxpayers' hard-earned money already spent. Fifty-seven depositions have already been taken, and several witnesses have been unduly harassed.

    While I am encouraged that the hearings will finally begin, I cannot help but remain somewhat pessimistic, and I say pessimistic because I do not believe that these hearings will reveal anything that has not already been brought forth by the Senate investigation. The Senate has said what most Americans already know, and that is that our campaign finance system in America is badly broken and in serious need of repair.

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    The real issue before us today is not conduit payments to the Democratic National Committee; rather, when will we begin to have serious debate on reform in the campaign finance laws? I believe that we have an opportunity to seize the moment and provide real reform if the people are to believe that we are serious.

    It is no secret that the current system of campaign finance laws is seriously flawed. These laws threaten the very essence of our democracy. It is imperative that we reform the current system and send a message that this Government is not for sale. We must eradicate the notion that money can buy justice, elections and anything else that you want in America. The current system has too much money in it. It is tantamount to capitalism run amok.

    This is perhaps capitalism at its very worst. This is the vulnerableness of capitalism which undermines the very essence and ideals of democracy. We must send a message that no part of our Government system can be bought or purchased.

    Campaign finance reform is one of the critical issues of the day. The stakes are too high for us to dally around and do nothing about it.

    There have been over 70 bills introduced in this country alone regarding campaign finance reform, and the leadership has yet to schedule debate on any of that. Perhaps Gandhi was right when he said, possession of power makes men blind and deaf. They cannot see things which are under their very noses and cannot hear things which invade their eyes.

    It seems to me that those in power want only to perpetuate it. However, I urge the American people to meet the power that wants to maintain the status quo with like and equal resistance that demands real campaign finance reform.
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    History has thrust upon us, upon our generation, a unique and important destiny; that is, the opportunity to complete a process of campaign finance reform, to make democracy real in the lives of each and every American. This is our opportunity to make the magnificent words of the Constitution and Declaration of Independence ring true, that this is, in fact, a Government by and for the people; not by and for the rich and wealthy, but by and for all the people, irrespective of income, gender or heritage.

    As the lights dim and the cameras fade on this hearing, I urge the leadership to give the people what they want, what they desire, and that is real campaign finance reform. And when we give the people what they want, when we give the people real campaign finance reform, they will know that the role they play is not contingent upon the size of their pocketbook or that their influence is not weighted by the size of their contributions.

    I thank you, Mr. Chairman, and yield back the balance of my time.

    Mr. SHADEGG [presiding]. The gentleman yields back the balance of his time.

    [The prepared statement of Hon. Danny K. Davis follows:]


    Mr. SHADEGG. The gentleman from Ohio, Mr. LaTourette.

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    Mr. LATOURETTE. Thank you very much, Mr. Chairman. It is a pleasure to see you seated in the chairman's chair.

    Mr. SHADEGG. Thank you.

    Mr. LATOURETTE. I appreciate very much the opportunity to make remarks today, and I also look forward to tomorrow's inaugural hearing. Like many members of the panel who have already spoken today, I have been frustrated and saddened by the length of time that it has taken to get to this juncture in the hearing process.

    However, unlike some of the statements that have been made today, I am not perplexed, nor do I wonder as to what the cause of the slowness of pace is, the cost or the progress of the fact-finding process.

    My primary vocation, before coming to Congress, was that of a county prosecutor. Like other members who serve on this committee who had the honor and pleasure of representing their State before the bench, there are many war stories that each of us could tell detailing the creative and imaginative tales that defendants from time to time had to explain why they had missed their date with the judge.

    My personal favorite was, a gentleman called up one day and said that a rather painful circumcision had prevented his arrival at the courthouse for 2 weeks, but he hoped to be with us soon.

    What causes the raising of suspicions and indeed raises the hackles of many of us on this side of the aisle is the constant evasion. A rule of thumb that I adopted in my legal practice was given to me by a rather grizzled homicide veteran by the name of Tommy Doyle, and he said that the reason that people lie, the reason that people hide the truth, the reason that people prevaricate is that the truth is worse for them than the lie which they are willing to tell.
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    Sadly, the conduct of many during the public observance of this series of scandals has put me in mind of many of the wayward defendants of the past and, I would suggest, has had more than a direct result of impeding the orderly progression of any legitimate or worthwhile probe. We have seen people who have fled the country and the jurisdiction of this Congress. We have seen those who would choose to use the fifth amendment as a sword rather than as a shield, to frustrate rather than to protect.

    We have seen a variety of statements that would be putting some of my old defendants to shame; ''I don't recall facts or events'' is one; ''there is no controlling legal authority''; ''everybody does it'' is something that I have heard from my children on many occasion; and that ''the Pendleton Act is obscure, antiquated or vague.'' And if I had a nickel for every defendant who claimed that the law under which he or she was being investigated or prosecuted was vague, I would have been retired long ago.

    But perhaps the classic was in today's Hill newspaper—and I never thought I would see this from anywhere, certainly from Capitol Hill, other than from my children—the caption that ''the dog ate my videotapes.'' Certainly we have reached a new level of excuses in this investigation.

    As a youngster, I remember being fascinated by a photograph that appeared in one of the papers of Rosemary Woods who was, of course, the secretary to President Nixon during the Watergate hearings, and the musings of the bemused editorial writers was that Ms. Woods must have had some gymnastic ability to reach back and somehow cause a gap of minutes' long in an audiotape for a reel-to-reel tape recorder that was located behind her desk.
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    I look forward to the coming weeks because the bizarre compilation and editing of the videotapes just recently revealed—released by the White House, I suspect will demonstrate skills by their video technicians that will rival the Korbuts, the Comanecis and the Rettons.

    Mr. Chairman, I would suggest that between the two extremes—and that is, those within and without Washington that want these hearings to get the President and to get the Vice President, and those within and without Washington that will protect the President at all costs and would suggest we do nothing to follow the trail of illegality—the vast majority of members on this committee and in this House hope that the fact-finding process will develop a discovery of who has violated the laws already in existence; and that those who have sworn an oath to uphold the laws of this country do their job and do so whether or not American policy and secrets were sold for electoral success in November 1996, and that those who stonewall, obstruct and obfuscate are publicly condemned and driven from office.

    And finally, that the flawed manner in which we finance our Federal campaigns be examined in the orderly and thoughtful manner that is the hallmark of this institution, and that reform be the child of bipartisan labor rather than the spawn of media-driven, partisan advantage-seeking, quick fixes that sound good, but at the end of the day fail to restore the trust in the way we finance campaigns in this country.

    Thank you, Mr. Chairman, and I yield back my time.

    Mr. SHADEGG. The gentleman yields back the balance of his time.
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    And the gentleman from Massachusetts, Mr. Tierney.

    Mr. TIERNEY. Thank you, Mr. Chairman. I don't want to belabor this point, which seems to be something we are all doing a bit of here today, but I largely associate myself with the remarks of my colleagues, that have been covered, that I would otherwise raise—in particular, the unfair manner of presentation of information that we have seen that has been suggestive and predisposed to a preconceived conclusion; the duplication of the Independent Counsel's inquiries and the Senate's parallel inquiry; the slow and unfocused proceedings that we have had here, including numerous lengthy depositions that result in either little or no information that is new or relates information which has already been unearthed elsewhere and reported publicly; the expenditure of millions of dollars of taxpayers' money to do what the Senate has already done, while not ever criticizing the Senate's job as insufficient.

    I want to point out that this is not the oversight and oversight committee; it is, in fact, the reform and oversight committee, and that we should be not duplicating what the Senate has done. We have said this since the beginning, and out of over 100 Members of Congress, tried to persuade this committee to either unearth something new that we haven't heard before; to have this be a nonpartisan approach so that what we do here can be credible; to include us in the planning of this, so that we can get beyond what seems to be the inability of the majority here to conduct an investigation that leads to anything new that the American public can look forward to; to either join with the Senate to do its investigation with it, so that we don't duplicate money and spend our resources unnecessarily; or refocus this investigation away from duplicative efforts and into things that are new and will lead us in some direction that expanded out just beyond the role of the White House—take a look at what happened in the House of Representatives and in the Senate in both parties—to go beyond that and to move forward.
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    We can stipulate, the American people can well stipulate, that the campaign finance system we have right now is not one that they enjoy or that they think is working particularly well. We can stipulate that both parties have probably had abuses that are not unlawful, but certainly unseemly; and this goes back to not the past elections but to elections before that.

    And I think that the numbers are there, the information has been made public and nobody is now surprised any longer about what this committee is coming up with, other than the fact that they are surprised probably to learn that most of these witnesses have already been deposed and investigated by the Senate.

    Most of these witnesses are giving us information that has already been disclosed to the President, to the Senate; and the fact is that we are not unearthing anything new.

    Let's agree to the fact that we need to move beyond this into a better system. Let's agree that we can do it a lot more economically than we have been doing it. Let's agree to stipulate to what we can stipulate, instead of having shows so we can get our face on the TV, and move this forward to either new information or to a cooperative effort with the Senate, so that we can preserve resources. And then let's do something that this committee is designed to do.

    It is a group that has had referred to it several campaign finance reform proposals, including one of my own that would, in a large way, reform the way that we fund campaigns here and give back integrity to the system and encourage people to once again be involved as voters and as candidates, with the sense that they own their campaign system and that they can move forward here with some confidence, that what we do here is in fact their business and not the business of hard money or soft money contributors to either campaign or either party.
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    We can do that. We should do that. We can certainly use the taxpayers' money better by having a simultaneous track in this House of campaign finance reform considerations while the Senate is going, either with our help or on its own, to do the rest of the work in terms of the investigation.

    That is what we can do. That is what we should be doing.

    And I will yield to my colleague here if he wants to make a point that we were discussing earlier about the fact that what we are really looking at here is some 30 checks that may be questionable—out of how many?

    Mr. FATTAH. I think I just wanted to add to the record that, as I understand it now, there are over 2.7 million individual contributors and, therefore, checks to the DNC in the election cycle; and some 130 of them are the subject matter of the refunded dollars and the questionable contributions. And that is not to minimize anything, any illegality that may have taken place, but to put in context some of the more outrageous suggestions about the lack of controls and so on.

    You know, the vast majority of checks that were raised and processed through the DNC were correct and appropriate contributions; and what we are really talking about is something less than 2 percent of all of the contributions being in question.

    So as we go forward, I think we should root out whatever wrongdoing may have taken place on all sides, but we should also keep in context that for the most part this was an election run by the DNC in which, even with all of these complicated regulations and rules, they did their best to comply with.
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    Thank you.

    Mr. TIERNEY. I yield back the balance of my time.

    Mr. SHADEGG. The gentleman yields back the balance of his time.

    The Chair recognizes the gentleman from New Hampshire, Mr. Sununu.

    Mr. SUNUNU. Thank you, Mr. Chairman. Let me begin with two brief points. One is in response to the notion that somehow this committee is not uncovering anything new. We can cut right to the chase.

    The three witnesses who we are going to hear from this week were not contacted by the Senate. They were not contacted by DOJ. They have not testified before the Senate committee. Their testimony will be new. Their information that they will have to offer us is important. And there are many other revelations, I think, that will come out of this committee. But the fact is, we are getting right to new and important information immediately in this hearing.

    The second point I would like to make, and I will emphasize it later in my remarks, is to counter the assertion that has been made repeatedly today—and it is fundamentally flawed—and that assertion is that somehow a loophole is an invitation to violating the law. Nothing could be further from the truth.

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    A loophole, however objectionable we may find it, is simply an invitation to take advantage of a loophole. A loophole is not an invitation to accept illegal conduit payments. It is not an invitation to accept illegal contributions from a foreign citizen. A loophole itself is not an invitation to violate the law; and to suggest that it is, in some way, shape or form, is to misunderstand the nature of our law and our obligation to obey those laws.

    Mr. Chairman, today's hearing marks the beginning of the public phase of what has been a long and difficult investigative process. Our committee is challenged with the formidable task of shedding light on a series of campaign finance abuses. This effort is made even more difficult by two significant factors: one, the complex nature of political campaigns, especially those that are national in scope; and second, the degree to which this committee has been obstructed in its investigation.

    During the past year, the public has heard testimony detailing illegal fund-raising events on church property, illegal campaign contributions made through false donors, illegal contributions made by noncitizens and illegal laundering of union funds for political campaigns.

    These events are not alleged. This information is not hearsay. Testimony includes many eyewitness accounts. Campaign committees have returned illegal funds and fund-raisers have pled guilty to felony charges. The breadth and scope of these abuses are unprecedented since the implementation of Watergate-era campaign reforms.

    Those who suggest the system made them do it are all too willing to ignore the fundamental legal and moral obligation we have to obey the law. Those who claim that changing campaign rules would address all of our concerns fail to understand the difference between using rules to one's advantage and violating Federal law.
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    Are we to believe that if Congress fails to change the rules this year, then the DNC and its fund-raisers will be forced to continue to violate the law? Of course not. A campaign that is willing to accept illegal soft dollar contributions will be equally willing to accept illegal hard dollar contributions.

    It is time for those that have violated the law to begin taking responsibility for their actions. Those in positions of responsibility must take responsibility for providing answers to these critical and lingering questions.

    First, was there a planned effort to systematically violate campaign finance law? A single illegal contribution would be scant evidence of such a pattern. $50,000 or $100,000 in illegal contributions might raise concerns. To date, the Democratic National Committee has returned more than $2.8 million in improper contributions.

    Second, did senior campaign officials know of or condone illegal fund-raising? During these past several months, echoes of denial, ''I don't specifically recall,'' and ''it wasn't our intent,'' are deafening. Moreover, these claims stretch the limits of credibility.

    And finally, did any foreign government plan to improperly influence America's political system through an illegal fund-raising network, and was such a plan carried out?

    Unfortunately, the work of this committee continues to be hindered by an unprecedented effort to avoid responsibility. Over 60 witnesses to these events have refused to tell Congress what they know. Twenty-two individuals have fled the country entirely or have gone into hiding. These are not the actions of innocent victims. They are the actions of conspirators with something to conceal.
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    The committee has been further obstructed by delays in receiving critical documentation from the Democratic National Committee and the White House. Repeated refusals to properly comply with committee subpoenas only suggest the existence of more damaging evidence. This week's production of White House fund-raising videotapes 3 months after subpoenas were issued only highlights the egregious nature of these obstructions.

    In the end, these tactics only serve to make us more determined in our effort to conduct a thorough and honest investigation of these matters.

    This is not a hearing about personalities, as some undoubtedly will charge. It is a hearing about securing answers to troubling questions surrounding the 1996 Presidential campaign, which, to date, have received only vague and inadequate answers.

    The long-term health of our Government is dependent on the ability of Americans to freely and fairly express their will through the election of our representatives. Illegal campaign fund-raising undermines the credibility of the election process and of Government itself.

    I look forward to hearing the testimony offered before this committee and I certainly hope we can carry out our duty in a professional manner for the good of the American people.

    I thank you, Mr. Chairman, and I yield back the balance of my time.

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    Mr. SHADEGG. The gentleman yields back the balance of his time.

    The Chair recognizes the gentleman from Texas, Mr. Turner.

    Mr. TURNER. Thank you, Mr. Chairman. These past few days have not done much to inspire confidence in any branch of our Government. The White House has engaged in inexcusable delays in turning over relevant evidence to the Congress. The Senate has killed bipartisan campaign finance reform with procedural devices, and meanwhile, the House of Representatives has not even considered a reform bill.

    Is it any wonder that people have lost confidence in our Government? They are discouraged not only by periodic scandals, but by the day-to-day abuses committed in the unending quest for campaign cash. They are further discouraged by politicians who seem unwilling to reform a system that is clearly out of control.

    Every day it seems the cynicism grows, eroding the trust upon which our system of Government depends. Democracy cannot survive without the trust and confidence of the people.

    We have an opportunity to regain some of that confidence today as these hearings begin, if we are willing to proceed in a fair and bipartisan manner. Tomorrow, we are going to hear from witnesses who have admitted to making illegal contributions to the Democratic National Committee. Every Democrat on this committee will join me in saying that this illegal behavior is wrong and that it cannot be tolerated.

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    We need to find out who was behind these illegal practices, how widespread they are and how we can prevent them in the future. At the same time, I would hope that every Republican on this committee would join in admitting that this practice is by no means confined to the Democratic party and that there are problems with our campaign finance system that go beyond the criminal actions of these witnesses.

    We need to remember that we are not here on behalf of the Republican or the Democratic party. We are here on behalf of the people who sent us here. We are here on behalf of the people who pay our salaries, and we are here on behalf of the people who are paying for this investigation.

    The American people want to find the facts. They want to know who is behind the illegal and improper fund-raising practices that plagued the last campaign, and they want to know what we are going to do to prevent future abuses and to reduce the influence of big money on our democratic process.

    I join with Members from both parties in seeking comprehensive reform of our campaign finance system. I have worked with the Blue Dog Coalition and the bipartisan freshman task force on bills that would ban soft money, require more disclosure and address the other loopholes and abuses that exist under current law.

    Just yesterday, I and other members of the Blue Dog Coalition filed a modified open rule to bring all of the major reform proposals—Republican, Democratic and bipartisan—to the floor of the House for an up-or-down vote. Next week, we will be seeking signatures on a discharge petition to bring this rule to the floor, and I invite everyone on this committee to join in that effort.
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    These hearings, like the ongoing hearings in the Senate, will make two things clear: Campaign finance laws were broken and the campaign finance system is broken. We should all be ready to address both of these problems in an aggressive and bipartisan way. That is our job.

    Mr. Chairman, I am hopeful that the work of this committee will be productive and that our singular goal will be to devise a campaign finance system that preserves and protects our Nation's grand experiment in representative democracy.

    Thank you, Mr. Chairman.

    Mr. SHADEGG. The gentleman yields back the balance of his time.

    [The prepared statement of Hon. Jim Turner follows:]


    Mr. SHADEGG. The Chair recognizes the gentleman from New Jersey, Mr. Pappas.

    Mr. PAPPAS. Thank you, Mr. Chairman. We in the Congress have a sacred responsibility to the American people. The Government Reform and Oversight Committee is investigating alleged improprieties, and several of us have said we will pursue this investigation wherever it may lead.
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    Our democracy was founded on a system of checks and balances, and we are in a situation where we need to check into potential abuses of the campaign finance system. The investigation is simply our responsibility as laid out under the Rules of the House. Indeed, as the name of this committee states, we have a responsibility to oversee the executive branch.

    At the heart of this investigation lies a central question: Did illegal foreign contributions corrupt Government policies? To answer this question, the actions of a complex web of Government agencies, administration officials and campaign aides must be untangled.

    As a member of the House National Security Committee, the notion that foreign donors might have tried to subvert the American political process to carry out their own agenda greatly disturbs me. The consequences and the potential impact that foreign influence could have upon our national security is staggering.

    I hope that we can all join together in a bipartisan manner to find out the consequences of this alleged foreign influence.

    There are a wide range of issues to be explored in this investigation, and we must pursue them in a neutral and nonpartisan manner as best we can. Justice wears a blindfold as a symbol of impartiality, and so too must this committee throughout the course of this investigation.

    Thus far, we have issued subpoenas, conducted depositions and reviewed documents. I now look forward to hearing the testimony of the witnesses with the hope that what we learn during the course of this investigation will help us to fix our current system of campaign financing.
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    Thank you and I yield back.

    Mr. SHADEGG. The gentlemen yields back the balance of his time.

    The committee will recess subject to the call of the Chair.


    Mr. SESSIONS [presiding]. The committee will come to order. I am glad to have the opportunity today to speak before this committee and the American people on the issue of illegal campaign fund-raising.

    I want to repeat that. The topic of these hearings is illegal campaign fund-raising. It is illegal for Federal candidates to receive contributions from foreign donors. It is illegal to funnel donations through straw donors. It is illegal to solicit contributions on Federal property. It is illegal for a Federal candidate to coordinate the spending of soft money contributions. These are the issues which this committee is reviewing.

    We are trying to determine whether the White House, the Democratic National Committee, the President, the Vice President or others may have broken the law. What confuses me is the attention that is currently being given to campaign reform initiatives that do not address the rampant rogue behavior in which this administration has engaged. Nothing in legislation before the Congress would have prevented the illegalities we are investigating today. This is because the individuals we are investigating have blatantly and consistently ignored the law. So I ask members of this committee and the American people to have patience as we sit through this enormous amount of information that is coming to light in this slow, methodical manner. Once we have determined how the laws were broken, and only then, will we be able to fix the law.
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    The slow release of information to this committee is the result of a concerted effort by the White House and the Democrat National Committee to delay the investigation. The White House and the Democrat National Committee have resisted our requests for cooperation and have snubbed our legitimate subpoenas, which, of course, is a slap in the face of Congress. Unfortunately, we have come to expect this from the White House.

    I witnessed the repeated resistance from the White House to previous attempts by this committee to get information. What I did not expect was the complicity exemplified by my colleagues on the other side of the aisle to the stonewalling of this administration. When the Congress seeks information, the American people are seeking that information, and any attempt to stifle the Congress is an attempt to shut out the American people.

    I hope as we hear the depths of corruption that this committee has uncovered, that we will see a renewed call from the minority of this committee to pursue the information further. However, even without that cooperation, I have confidence that our chairman, Chairman Burton, and his staff, who I find to be among the most professional of professionals in the House of Representatives today, will get that done for the American people.

    I hope that as we pursue this investigation, that we can continue to begin the process not only of uncovering the violations of the law, but also how we are going to attempt very carefully to ensure that the American people understand this so that we can avoid this in the future.

    That is the end of my statement. Thank you.
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    The gentleman from Tennessee, Mr. Ford, is recognized for his opening statement.

    [The prepared statement of Hon. Pete Sessions follows:]


    Mr. FORD. Thank you, Mr. Chairman. Mr. Sessions, as a fellow freshman colleague, it is good to see you sitting in the chairman's chair, even if it is for a short period of time.

    Several months ago I was back home in my home district of Memphis, TN, for a district work period, and as usual found myself watching C–SPAN late one evening. I confess I had a very light evening schedule, Mr. Chairman. Although I do not remember exactly what conference, convention, speech or forum was being rebroadcast, I clearly remember the story the Speaker was telling the audience, and because I believe that it captures the situation confronting this committee and even this Congress as a whole, I want to share it briefly with you today.

    During the middle of the summer, two men met in a small town in Arizona and discovered that they were both traveling to the same place. One of the men has a horse, and the other has directions to their destination. But because each man has something that the other needs, they agree to embark together upon a journey to their mutual destination, one man supplying the horse, the other the directions.

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    For several days they ride together, until one afternoon it becomes so hot that they decide to stop riding until the sun goes down. After dismounting, the man who owns the horse proceeds to sit down in a small patch of shade created by the horse. Unwilling to sit in the sun, the other man tries to convince his traveling companion that he should get to sit in the shady spot, and what ensues is a heated argument between the two men over who has the right to sit in the shade.

    The man who owns the horse says he is deserving, because, after all, it is his horse. The other man counters that the directions are as important as the horse, so he, too, should get to sit in the shade. As the argument over the shade grows more contentious, the horse gallops away, leaving both men standing with the sun beating down on them.

    According to our C–SPAN guest, the lesson of this story is not to get caught up too long in arguing over shadows, because you risk losing what really matters, the substance. When I think about this proverb of sorts in the context of our committee's investigation and the Congress as a whole, I can come to only one conclusion: Campaign finance reform is the substance.

    By that I do not mean to imply that we should not devote resources and energy to investigating fully and fairly whether laws were broken during the last election cycle. Rather, my point is only that as we must not lose sight of what really matters in the end.

    Tomorrow, I anticipate that three witnesses will come before this committee and testify that they were used as conduits for contributions to the Democratic National Committee, which, if proven true, would constitute a violation of laws. Indeed, if it is true, I am deeply troubled by the fact and would like to know not only why and how it happened, but how we can prevent it from occurring again.
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    Notwithstanding all of the assertions and claims to the contrary, what I do not see is evidence that this violation of the law was part of a master plan orchestrated by the Democratic National Committee to funnel overseas money to the Democratic party.

    Moreover, it seems to me that if the majority party and members of this committee were concerned about the potential impact of foreign or inappropriate contributions to our political system, then during the last 8 months the committee would have expanded its investigation or at least acknowledged that large sums of foreign money have been funneled into the Republican party since 1992 from sources inside and outside of Asia, including Germany, Japan and even Korea. Yet we have heard nothing about these contributions.

    In fact, if I were sitting at home watching this committee's activities thus far, I might actually believe that all of the allegations raised by the Republican Congress represent the first instance in which there had been accusations that foreign or inappropriate money was contributed to a political party. In addition, I might also believe that Messrs. Huang and Trie are the only two people that have ever been accused of using conduits to donate money to our political parties.

    But the facts are quite different. As recently as July 1997, Thomas Cramer, a German national, was fined over $300,000 by the FEC for making illegal campaign contributions, almost all of them to the Republican party. The former co-chair, finance co-chair, of the Dole-Kemp 1996 campaign, pled, in what I believe was the largest settlement that the FEC was able to negotiate, I believe some $5 million to $6 million, Mr. Chairman, for using conduits to make contributions to the Dole-Kemp campaign.
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    According to the records from the FEC, they are currently investigating 27 conduit payment cases involving 214 respondents, and in the past several years have closed over 21 cases involving over 108 respondents. We must recognize, therefore, Mr. Chairman, that the whole system must be fixed.

    In closing, let me say that I want to get to the truth about campaign contributions during the last election cycle, regardless of where they may lead this committee, regardless of what party may be involved. However, I also want to expose and correct the fundamental flaws in our campaign financing system that have helped to give rise to many of the problems we are confronting today.

    I would hope, Mr. Chairman, and other members of this committee, that we would use this opportunity not only to talk about the shadow, to argue over the shadow, but also to confront the substance.

    With that, I yield back the balance of my time.

    [The prepared statement of Hon. Harold E. Ford, Jr., follows:]


    Mr. BURTON [presiding]. The gentleman yields back the balance of his time.

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    Mr. Snowbarger.

    Mr. SNOWBARGER. Thank you, Mr. Chairman.

    Mr. Chairman, as could be expected, the minority would like to talk about anything during these hearings except the many possible illegal activities of the Democratic National Committee, the President's re-election campaign, and the White House.

    But these hearings are not and should not be about campaign finance reform. These hearings are about the abuse of power. The President and Vice President of the United States are accused both in this Congress and on the editorial pages of newspapers across the Nation of breaking the law and hiding facts from the American people. These accusations command this committee's attention.

    Soon after last year's election, President Clinton returned to Washington to face tough questions about his campaign's very aggressive fund-raising effort. The President told the American people that the illegal money that was returned by the Democratic National Committee was not connected with his campaign. If you will please turn your attention to the monitors.

    [Videotape presentation.]

    [Note.—The videotape can be found in committee files.]

    Mr. SNOWBARGER. Does anyone want to take up this defense today? The President seems to be saying that someone else is responsible for those illegal contributions totaling more than $3.5 million. But this does not square with the evidence provided to the committee by the White House.
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    Again, please refer to the monitors.

    In this April 17th memo from the President's chief White House fund-raiser, Harold Ickes, to DNC Chairman Don Fowler, the true chain of command is laid out. The memo is very clear: Every allocation of money at the DNC must first be approved by the President's White House team.

    The truth is that the President was involved in nearly every aspect of campaign operations, from the drafting of direct mail fund-raising letters to routine budget issues. The President was kept informed of goals, projections, and changes in the DNC-Clinton-Gore fund-raising strategy.

    Even the administration's staunchest defenders cannot deny that the President knew in advance of the election that the campaign plan that his team designed violated the law in many ways. In fact, as this last exhibit on the monitor shows, they fully expected they would set a new standard for illegality in a Presidential campaign. They budgeted for it. The President's chief political aide told him the campaign would likely be hit with more than $1 million in fines. That is more than five times the largest fine ever imposed on a Presidential campaign to that point. Mr. Ickes knew this, Mr. Fowler knew this, and so did the President. They decided to gamble everything on victory in November and sort out the legal defense later. The end, they believed, justified the means.

    Throughout the many months leading up to these hearings, the administration has developed a highly refined series of explanations for every charge made, and as far as I can tell, there are five steps to this series. No. 1, we didn't do it; No. 2, we did it, but we didn't mean to; No. 3, all right, we meant to, but it is not against the law; No. 4, well, all right, it seems to be against the law, but the law doesn't mean what it plainly says; and, finally, No. 5, OK, we did it, we meant to, it is against the law, the law was clear, but, you see, everyone does it.
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    This is something new and disturbing in our political system. It is not uncommon for those accused of a crime to deny it. That is why we have juries. But what does it do to our system of justice, to say nothing of our democratic political process, when the accused displays contempt for the law, when they plead innocent by reason of collective guilt? It is a sad fact that this administration's defense of last resort is that the more the law is broken, the less significant the law is, and, therefore, the less respect it deserves. Their case rests not on the truth, but on their ability to convince the American people that they cannot trust anyone.

    Rather than lay the facts on the table, they gleefully trot out the latest poll showing that Americans have grown even more cynical about all public officials, and they pronounce the public singularly uninterested in these events.

    Mr. Chairman, whatever the administration would like the American people to believe, when it comes to shady campaign practices, not everyone does it. To my knowledge, no member of this committee does it. We don't accept illegal contributions from churches, we don't launder contributions through dummy corporations and impoverished nuns, we don't rent our offices to the highest bidder, we don't take money from foreign governments, we don't dial for dollars from our Federal offices, we don't move money illegally from one campaign account to another, and none of our campaign workers are hiding out in Communist China to avoid subpoenas. We don't all do it, Mr. Chairman, and to suggest that we do is not only unfair to those of us who play by the rules, it is insulting to those who place their trust in us and demeaning to the entire concept of representative self-government.

    I yield back the balance of my time.
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    Mr. BURTON. The gentleman yields back the balance of his time.

    The gentleman from Maine, Mr. Allen, is recognized.

    Mr. ALLEN. Thank you, Mr. Chairman.

    Mr. Chairman, we are finally here. After millions of dollars, hundreds of thousands of documents produced, months of wrangling over due process issues, and weeks of depositions, the House hearings are about to begin.

    The questions hang over these hearings. The media may ask, will we learn anything new? Maybe, maybe not. But in my opinion, there are more important questions that cloud this process. Two in particular go to the heart of this investigation and its role in protecting and improving our democracy.

    First, is this committee serious or just playing an elaborate game of gotcha on national TV? Second, are the members of this committee as committed to reform as we are to oversight? Or are these hearings just an excuse for inaction on campaign finance reform?

    With respect to the first question, there are ways to judge seriousness. We need, and the American people deserve, a full, fair and even handed investigation into the 1996 elections. If we rerun the Senate investigation, we are not serious. If we declaim loudly over minor infractions, we are not serious.

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    Early in this session this committee had the opportunity and the obligation to examine campaign abuses that may have occurred in recent Federal election campaigns, both Presidential and congressional, Republican and Democrat. But here we are hearing our first witnesses with 1 month left before we adjourn for the year. This committee has spent almost $3 million. Chairman Burton has issued 127 subpoenas that Senator Thompson has also subpoenaed. The committee staff have deposed 21 individuals who were previously deposed, interviewed or subpoenaed by the Senate committee.

    What should we do? Read the Senate transcripts? Read the testimony? Read the Senate depositions that were delivered to majority staff of this committee, but not to the minority?

    The Thompson hearings are at the stage of almost winding down. We could be more productive if we concentrated on reforming our political finance system instead of plowing old ground with this investigation.

    I have been holding community meetings in my district recently, and the subject of campaign finance reform always comes up. Last week in a meeting in south Portland, one constituent said, when my wife and I read about contributions of thousands of dollars, it makes what little we have given to candidates over the years seem like bubble gum. He added, we don't want to do it anymore.

    Soft money contributions to the national parties are undermining this democracy, not just because the very wealthy get access denied to the many. It is also true that soft money, big money, diminishes the role of every voter, every small contributor, and every volunteer. Participation in politics is the lifeblood of this democracy. Big money is turning participants into spectators, grassroot workers into TV ad watchers. It is not a healthy trend.
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    One of my constituents gave me $20 for my campaign last year. He wrote in his letter urging me when I got to Washington, not to forget the people from the grassroots who sent me here. What place remains for him in a system so addicted to big money?

    We can't create the perfect system, but we can make this one better. Our Bipartisan Freshman Task Force developed a campaign finance reform proposal. It is a good bill. If it had been in place before the 1996 elections, we would not be here at this hearing today.

    I cannot help but believe that this committee, that the public would be better off and we would have done a better job discharging our duties, if we spent more time on campaign finance reform than we do with this hearing today. The time has come to legislate, not to continue an investigation that seems futile and duplicative. The American people deserve that. The state of our political system demands it. Yet the Republican leadership in the Senate yesterday killed campaign finance reform.

    We had another and better option at the beginning of this process. This committee could have undertaken a bipartisan comprehensive investigation of the 1996 campaign. We could have productively educated the American public in a timely manner. That did not happen.

    Sadly, I have come to believe that the primary function of this investigation is to provide the majority with an excuse for inaction on campaign finance reform. That is not a good reason for the hearings we begin today. We should legislate, not just investigate.

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    I hope, I still hope, that these hearings will reveal new information that will get to the heart of the abuses in the 1996 campaign. But I fear that the price we pay for these hearings is inaction on campaign finance reform. The Speaker has said he wants to delay any action until after these hearings are concluded. It is not clear to me when that would be.

    We should have done better, and I believe we still could.

    Thank you, Mr. Chairman.

    Mr. BURTON. The gentleman yields back the balance of his time.

    Mr. Barr of Georgia.

    Mr. BARR. Thank you, Mr. Chairman.

    Mr. Chairman, when this committee began to prepare for these hearings many months ago, I had high expectations that it would expeditiously and comprehensively reveal the details behind the many concerns raised over the apparent abuse of Government information, resources and personnel to fuel the re-election effort of a sitting President and Vice President of the United States.

    Although the scale of abuse appeared unprecedented from day 1, Mr. Chairman, I was confident that this committee's historic charter to keep the executive branch accountable to the people, combined with your personal dedication to the task, would ensure a successful investigation. But notwithstanding your best efforts, Mr. Chairman, I am not as sanguine today as I was back then, for the events that have unfolded during the course of preliminaries leading to this hearing have raised a question that simply cannot be answered even by this committee.
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    From the very beginning of this investigative effort, we have witnessed an unrelentingly orchestrated attempt by some on the other side of the aisle to change the subject from past wrongs to so-called future reforms. Like the youngster who murders his parents only to throw himself at the mercy of the court as a poor orphan, we have had a steady drumbeat to change the subject from the world of past violations to the world of future improvements.

    The constant campaign to change the subject has been insidiously assisted by a concerted effort by the highest officials in the executive branch to obstruct, to obfuscate, to dissemble, and to delay interminably the production of documentary evidence subpoenaed by this committee. The most recent revelations that tapes existed of White House fund-raising activities that miraculously escaped notice for months of pending subpoenas from this committee is only the most recent indication that the official process by which we govern ourselves in this republic has been made a complete mockery by this administration.

    We read a letter, more accurately, Mr. Chairman, that might be described as a defense brief, authored by the Attorney General of the United States, stating that selling access to the highest offices in the land is OK. Mr. Chairman, with that attitude prevailing at the other end of Pennsylvania Avenue, I suppose it should come as no surprise that we are having to deal constantly with delays and obstruction from the other side in this committee.

    Mr. Chairman, as we open what should be among the most important series of hearings ever conducted in this body, let me make three brief observations. One, a refusal to comply with congressional subpoenas has nothing to do with campaign finance reform. It has everything to do with illegality. Two, an abuse of public office through its sale to foreign interests has nothing to do with campaign finance reform. It has everything to do with illegality. Three, obstruction of justice by impeding government investigations has nothing to do with campaign finance reform. It has everything to do with illegality.
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    Mr. Chairman, let us be mindful of what history teaches us about such matters. Twenty-three years ago this past July, the House Judiciary Committee voted to recommend that President Nixon be impeached. In its three articles of impeachment, the committee charged the President with high crimes and misdemeanors, including obstruction of justice, abuse of office, and unlawful refusal to comply with congressional subpoenas.

    As we look over the past few years of executive branch misconduct, and especially over the last several months, from the unlawful firing of the White House travel staff to make way for political cronies to the securing without any lawful authority the confidential files of the FBI of those persons considered White House enemies, to the phone calls from Government offices for hard money campaign donations, to the raising of funds from illegal foreign sources, and now to obstruction, we are struck by the sorry state to which our executive branch has fallen.

    The people of this republic depend for their common welfare and defense on an individual elected to the highest office in the land who is sworn to take care that the laws be faithfully executed. Mr. Chairman, that question, the question that America asks, is where is that person?

    Thank you, Mr. Chairman.

    Mr. BURTON. I thank the gentleman.

    The gentleman yields back the balance of his time.
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    We will stand adjourned until tomorrow morning at 10 o'clock.

    [Whereupon, at 5 p.m., the committee was adjourned.]

44–527 CC


before the



OCTOBER 8, 1997

Serial No. 105–50

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Printed for the use of the Committee on Government Reform and Oversight