For Gingrich, a polemicist intent on promoting the World According to Newt, the method is to use organizations dedicated to spreading his free-market gospel, funded by business people who are under no obligation to reveal their identities or donations. For Gephardt, a master networker, the answer is a special “leadership PAC” that allows him to share the lifestyle of his wealthy contributors, including a ski vacation in the Rocky Mountains and summer weekends at a North Carolina beach resort. All in all, cozy arrangements. How they work:
Gingrich has an ordinary fund-raising committee, the Friends of Newt Gingrich, which will raise $2 million for his 1994 campaign. But he is also tied into a variety of other enterprises-videocassettes, TV shows, lecture series–that exist outside the realm of campaign-finance laws. Executives like Dwayne Andreas of Archer-Daniels-Midland Corp. pump money into GOPAC, an organization headed by Gingrich that helps other Republican candidates. One piece of GOPAC literature boasts that the candidates who have listened to Gingrich’s inspirational tapes have issued a “plaintive plea: I wish I could speak like Newt.” It is hard to know how much donors give because GOPAC skirts federal-disclosure laws, claiming it concentrates on teaching political skills. The Progress and Freedom Foundation, a Washington think tank that finances lectures by Gingrich on the topic “Renewing American Civilization,” also claims to be exempt from disclosure rules. But one can get a clue by watching the videotapes of the lectures, which are given as courses at several universities, in-eluding Penn State and the University of California, Berkeley. In these talks, first analyzed by the Capitol Hill newspaper Roll Call, Gingrich regularly pauses to plug some corporation and its CEO. In one class, he waxes rhapsodic about the Milliken Inc. textile corporation and CEO Roger Milliken: “an extraordinary man… one of the most forceful human beings I have ever dealt with.” Gingrich denies that these heavy-handed plugs had anything to do with Milliken’S past contributions of more than $250,000 to GOPAC. Gingrich, a former college professor, stresses that the lectures also praise companies that have no financial or political connection to the congressman. Maybe so, but Gingrich, an avowed free trader, began raising questions about the GATT free-trade agreement shortly after meeting with Milliken this summer. Gingrich’s criticisms helped stall passage of the treaty last week.
Gephardt’s fund-raising vehicle is the Effective Government Committee, his personal leadership PAC. Leadership PACs are supposed to raise money for less powerful congressional colleagues. The majority leader’s PAC has been among the most aggressive, bringing in $1.9 million since 1991. There’s only one problem: 73 percent of the money taken in by Gephardt’s PAC never found its way to these needy candidates.
Where did it go? “Operating expenses,” say Gephardt advisers, These included: tens of thousands of dollars for luxury beach-cottage rentals, limousines and restaurant bills; $2,500 for Baltimore Orioles luxury box seats; $424 in racquetball fees, and $738 for a Telluride, Colo., firm that arranges sleigh rides. Gephardt’s advisers say these perks are needed to entice contributors into giving money.
Entice they do. For the past several years, Gephardt has drawn dozens of contributors to his vacation retreats, including one last winter at a $250-a-night ski resort in Telluride. For a $5,000 political contribution, wealthy businessmen got four days’ lodging, lift tickets, gourmet meals–and, most valuable, hours of face-to-face schmoozing with Gephardt, “It was a chance to get some quality time with the congressman,” recalls Stanley Barer, a Seattle shipping executive. Over the last several years, Gephardt’s PAC also has paid for 20 to 30 friends, political supporters and financial backers - some of whom have interests in legislation before Congress-to join him for long weekends at a beach resort on the Outer Banks of North Carolina. “There is no more relaxing and enjoyable time than summer in the Outer Banks,” Gephardt wrote soliciting a handful of big-money donors to join him over the Fourth of July weekend. “There will be time for fishing, tennis, golfing, walks on the beach .., (and) nightly volleyball games before heading to dinner.” In an interview with NEWSWEEK, Gephardt said these trips help maintain his political and financial network. “I don’t want to pretend it’s hard work, but believe me this is not a vacation. This is a way to keep in touch. It’s kind of like a family gathering.”
Gephardt’s staff calls the events “fund-raisers,” but returns appear meager at best: Federal Election Commission records show that the PAC spent $44,000 this summer to pay for Gephardt’s holiday-and raised only $35,000, a $9,000 net loss. Gephardt adviser Robert Bauer says an additional $20,000 was pledged.
What do the executives get out of this arrangement? It’s rarely possible to prove a quid pro quo, but getting an hour, let alone a weekend, with the majority leader can save their companies billions of dollars. Stanley Barer, the Seattle shipping executive who joined Gephardt in Telluride last February, has been trying to get federal subsidies for his industry, Gephardt denies that these executives buy anything with their contributions. But it certainly doesn’t hurt to have the ear of the majority leader, and the shipping legislation sailed through the House earlier this year.
And what does Gephardt get out of all this bonding, besides a better volleyball serve? “We’re cementing relationships with donors,” says Gephardt adviser Bauer. And getting some free rides. Gephardt regularly hits up corporations for use of their company planes. In a two-month period this summer, records show, the House majority leader flew on planes provided by Shell Oil, Archer-Daniels-Midland, Occidental Petroleum, Textron, Fisher Scientific and Thorn Americas. Gephardt says his busy schedule doesn’t always allow him to fly commercial.
At the end of his North Carolina vacation, for instance, Gephardt needed to get to St. Louis that day and Witchita, Kans., that evening. No need to call USAir, A Gephardt staffer merely phoned a lobbyist for Textron Inc., the giant defense contractor. The company quickly dispatched a Citation jet to the Outer Banks. “We were told he needed to get to a fund-raiser,” said Gene Kozicharow, a Textron spokesman.
Gephardt says it was all perfectly legal; his PAC and congressional campaign committee paid Textron in advance for the flight-sort of. Under federal rules, the Gephardt committees paid $3,381 for the flight, the equivalent of first-class air fare. But the market cost of chartering a Citation would have been $14,000, according to an air-charter service.
Both Gingrich and Gephardt say they favor political reform-and yet helped ensure that such reform didn’t occur. The campaign-spending legislation ultimately died from a Republican-led filibuster, but only after being delayed for a year by Gephardt’s House leadership. A lobbying reform bill was defeated in large part by a last-minute guerrilla attack by Gingrich. Having it both ways is an ancient congressional tradition, but Gephardt and Gingrich have certainly shown unusual dexterity.
Gets big money from corporate executives like gArcher-Daniels-Midland’s Dwayne Andreas (far right).
Funds Gingrich college-lecture series that extols free markets– and plugs big contributors.
Gingrich’s own cable television show, “Progress Report,” receives money from major corporate sponsors.
Gingrich’s regular campaign re-election committee has taken in about $2 million since 1992. Big donors prefer giving to GOPAC, which has no limits on contribution size.
PAC spent $35,000 to entertain 20 corporate executives on a four-day trip featuring lift tickets and catered meals.
Gephard’s July 4 celebration draws friends and supporters together for sun, sand, surf and night volleyball.
Gephardt travels the country, courtesy of Textron, Shell Oil and other companies.
A skybox at Baltimore Orioles games and limousines.
