Editor's note: At press time, Senator Dole announced that the Better America Foundation, a focus of this article, was disbanding. In the weeks leading up to the announcement, the American Prospect had confronted the Dole campaign with questions about the foundation's involvement with Dole's Senate and presidential campaigns, while the Associated Press reported that the foundation was conducting activities useful to a presidential bid.
This is the second in a series of profiles of politicians and their fundraising efforts. The first article, "How Money Votes: An Oklahoma Story" (TAP, no. 19, Fall 1994), was about Congressman Bill Brewster, a Democrat on the Ways and Means Committee.
When Senate Majority Leader Robert Dole announced his presidential candidacy April 10, his Midwest roots figured prominently in the speech. "Our problems are not too difficult to handle," he said in Topeka, Kansas. "It's just that our leaders have grown too isolated from places like Topeka--embarrassed by the values here."
It's not clear whether Dole included himself in his reference to "our leaders," but perhaps he should have. Although Dole presents himself as an advocate of political reform, he maintains one of Washington's oldest and most extensive fundraising machines. He has torpedoed past efforts at reform, and in May he brought to the Senate floor a Republican proposal to scrap public financing for presidential elections. Dole's campaigns have admitted to intentionally violating campaign laws in the past, and today an array of loosely affiliated organizations that Dole created raises large sums of money from a few wealthy interests with a stake in the senator's legislative work. The laws governing political fundraising, passed in 1974, were supposed to prevent financiers from using their donations to obtain influence with public officials. But the laws do not effectively regulate money that goes to ostensibly independent bodies--a loophole Dole appears to have successfully exploited.
In a prepared statement, a Dole spokesperson said that "there is absolutely no connection between the Dole for President campaign and any other organizations that Senator Dole supports." But a closer look at Dole's record, pieced together from public records and interviews, shows that these organizations have advanced the senator's ambitions while maintaining close ties to his campaign and Senate offices:
- Campaign America, the independent political action committee Dole founded, has promoted Dole's candidacies for the Senate and the presidency by staging events at which Dole appears; it has also provided resources that work to advance Dole's ambitions. In effect, this has allowed Dole's supporters to finance Dole's causes well in excess of what they could legally give directly to Dole's campaigns.
- The nonprofit issues foundation Dole founded, the Better America Foundation, has helped lay the groundwork for Dole's presidential bid by providing staff and resources whose work directly or indirectly advances Dole's candidacy. The foundation has regular contact with Dole's Senate staff, originally resided in Campaign America's office, and has commissioned polling by the same firm Dole's campaign uses. And unlike Campaign America, the foundation does not have to disclose its sources of funding.
- Through Campaign America, Dole accepts hundreds of thousands of dollars worth of cut-rate air travel from corporations that benefit from his legislative activities--the same corporations that also donate generously to his foundation and benefit from his legislative work.
- As documented in the New York Times and elsewhere, Dole benefitted from a preferential real estate deal arranged by one of Washington's most notorious influence seekers, Archer Daniels Midland CEO Dwayne Andreas. Dole continues to accept ADM money for his foundations and PAC, all the while doing ADM's bidding on Capitol Hill.
- In another episode already reported by the press and investigated by a congressional committee, Dole used the power of his office to aid the business interests of one of his top fundraisers, who in turn used his business interests to increase the value of Dole's own financial holdings.
Of course, the real significance of this pattern--much of which has not been previously reported--may lie not in what it says about a particular senator or even a presidential candidate, but in what it tells about our system for regulating political fundraising. Dole's story is all too emblematic of how high-profile politicians use an array of loosely affiliated PACs and nonprofits to fill their fundraising coffers, shore up loyalty among potential allies, and build long-term relationships with the nation's wealthiest interests. It is also indicative of how the public and the press, increasingly desensitized to conflicts of interest, are willing to give veteran politicians a free pass for sins of the past. Oddly, Dole's campaign finance history has gotten virtually no ink in the national media this election cycle. To be sure, Dole is not the only prominent public official engaged in these practices. But Dole was a pioneer of these tactics, and he remains one of the most successful at employing them.
THE SENATOR'S NEW CLOTHES
Although virtually every candidate for office poses as a man of the people, the gap between rhetoric and reality is particularly glaring in the case of Dole, a millionaire who has lived in Washington for three decades and makes his home in the Watergate complex.
Dole can talk good-government reform with the best: "When these political action committees give money, they expect something in return other than good government." Dole said in 1983, observing that "there aren't any Poor PACs, or Food Stamp PACs, or Nutrition PACs, or Medicare PACs." But even as Dole championed the reform cause, he worked behind the scenes to smother it. In December 1985, during his first term as Senate Majority Leader, Dole headed off a popular reform proposal by promising it would get a vote in 1986. Congress did vote on the bill late that year, passing PAC reforms overwhelmingly; yet Dole himself voted against the PAC limits, and--as the Associated Press put it--"he appeared in no hurry to bring the matter to the floor." Bowing to that proposal's popularity, Dole promised the Senate would vote on it for final passage in a few days. It never did.
That November, Democrats captured control of the Senate, and vowed to enact reform. Again, Dole publicly supported the effort: "I do not believe there will be any effort to stall any such legislation," he promised. But the next fall, Dole led a marathon filibuster against the Democrats' bill, declaring it an incumbent-protection measure and promoting his own plan, which would have threatened him much less.
In the new session of Congress convened in 1989, Dole again proposed campaign finance reform, as did the Democrats. "We Republicans are determined to bring grassroots politics back to the campaign scene," Dole wrote in an op-ed for the Washington Post. Once again, however, partisan disagreements stalled the reform drive. This time a bipartisan reform panel was convened to make recommendations, with Dole selecting half the panel's independent experts. "I do believe there is some hope we can form a bipartisan compromise based on the [panel's] recommendations," Dole said in 1990. "If we're really concerned about cleaning up the campaign sewer money, then it's about time to spray the sewer stench with a big can of Lysol."
Yet just two months later, Dole and other Republicans offered legislation that completely ignored the recommendations of their own appointees for flexible spending limits. "We can either get serious or continue to make speeches and protect the status quo on Capitol Hill," Dole said, even as he insisted he could not abide by what the bipartisan reform panel recommended. Shortly thereafter, Dole and his colleagues opted for more speeches and the status quo.
The stalemate has continued through the 1990s. In 1994, Dole and his fellow Republicans killed the Democrat-sponsored campaign finance bill, the most ambitious attempt at reform since 1974. And this year, with Dole again the Senate Majority Leader and setting his party's agenda, he has uttered hardly a word about campaign finance reform. Instead, in May Dole joined conservatives in calling for a rollback of presidential public financing, the one initiative thought by most reformers to have had any success at all.
The most familiar part of the Dole fundraising machine is his Senate campaign committee, Dole for Senate. According to records on file with the Federal Election Commission (FEC), since 1987 the committee has raised $3.26 million, with large chunks coming in from individuals and PACs associated with a few powerful interests: the Gallo winemaking family, the Fisher Brothers real estate firm, conglomerate American Financial, US Tobacco, and agri-giant Archer Daniels Midland. Though all of these companies have benefited directly from Dole's work in Congress--as we will see later--there's nothing illegal about this money. It was all raised in small increments that never exceeded the limits on contributions set in 1974. (Under that law, individuals can give only $2,000 to the committee per six- year election cycle, while PACs can give $10,000 per six-year cycle.)
But behind the Senate committee are a host of other fundraising operations that pump thousands of dollars more into events and projects that advance his political ambitions--even though they are ostensibly unconnected to Dole's candidacies. Chief among these is Campaign America, the political action committee created by Dole and staffed primarily by former Dole advisers. Campaign America calls itself "independent" and "multicandidate," and in theory enjoys no special relationship with the Dole campaign. "Senator Dole set up Campaign America to promote and assist state and federal Republican candidates, and Republican organizations and parties,"a Dole spokesperson said. "For the record, in the last cycle Campaign America gave contributions to over 400 candidates in 47 states--even candidates who support other Presidential contenders."
Because of that status, Campaign America can accept donations like any other PAC, at levels well in excess of what Dole's campaign committee can take, just so long as it gives no more than $10,000 per election cycle to Dole himself. But that, of course, is the catch. In practice, Campaign America's treasury pays for political functions and maintains a large cadre of consultants, pollsters, and political staff, whose work continues to benefit the senator directly or indirectly. In addition, through the Campaign's travel account, Dole accepts tens of thousands of dollars worth of airfare from his corporate patrons (which his campaign then reimburses at minimal cost). Many of the providers of corporate aircraft to Dole are his biggest funders in hard cash, including ADM, American Financial, and US Tobacco. A review of Dole's campaign filings shows that he has accepted at least 151 trips on corporate jets since 1987, including 29 on the Federal Express executive jet and 15 on a jet provided by the NTC Group of Wappinger Falls, N.Y.
Dole takes in still more money through Campaign America by using it as a conduit for contributions to other Republicans from his major financial backers. On December 26, 1990, for example, public records show that members of the Gallo family and Gallo executive J.E. Coleman gave Campaign America $10,000 that did not count against the PAC's limits because it was funneled directly to the campaigns of Republican Senators Steve Symms, Alfonse D'Amato, Robert Kasten, and John McCain. The beauty of this system is that Dole gets credit for giving money to his Republican colleagues (thus potentially buying their allegiance in future presidential bids) without having to bump up against the FEC's contribution limits.
Dole has even used Campaign America to finance his presidential bids, though these activities have attracted attention from the Federal Election Commission. In 1993, the FEC determined there had been involvement by Campaign America in Dole's 1988 presidential race. On at least four occasions in early 1987, the agency found, Campaign America staged events in Iowa, site of the nation's first caucus, which benefited Dole's presidential bid despite Dole's failure to register as a presidential candidate and Campaign America's status as a PAC.
Invitations for the events were virtually identical to invitations later used by Dole's presidential committee and were printed by the same firm. "During this meeting I would like to hear your views and concerns while sharing some of my own with you regarding our shared Republican future," the invitations by Dole stated. Less subtle was a memo produced by Campaign America around the same time that stated, "Offer Iowans a friend in the White House," and a flyer that stated, "If Senator Dole is running for the White House, he's off on the right foot."
The events cost Campaign America some $33,000, and it spent other money on telemarketing in Iowa and purchases of voter lists in New Hampshire, site of the first presidential primary. Among other things, Campaign America obtained a business telephone line in New Hampshire that it later turned over to Dole's presidential campaign. All told, the FEC found, Campaign America spent about $47,000 on behalf of Dole's presidential bid, $42,000 more than the law allows. The FEC said Dole's presidential campaign "knowingly accepted" the help.
And that may not be the whole story. According to the agency's original investigative report on the case, Campaign America sponsored 19 events in Iowa in 1986-87. All were "town meetings" similar to the four the FEC said were in violation of the presidential campaign laws. The FEC dropped from its case these and several other instances of possible violations, such as purchases of voter lists and campaign materials, for unknown reasons. (Records of FEC negotiations are strictly confidential.) Even so, though, the FEC ultimately fined the Dole campaign a record $100,000 and ordered Campaign America to cough up another $12,000.
While the FEC required both to admit that they broke the law, Dole was unapologetic, issuing a statement admitting nothing and belittling the case, saying, "This bureaucratic process is the best example yet of why we don't need public financing of congressional campaigns." In fact, Bob Dole's offenses took place in the privately financed presidential primary campaign, not the publicly financed general election.
Today, Campaign America is alive and well. Among its other activities, in January Campaign America made contributions to 17 state legislators in New Hampshire, where Dole has been courting support for his presidential bid. The PAC also pays payroll taxes in Iowa, indicating it has staff stationed there.
Dole's other big fundraising organs are his nonprofit foundations, chief among them the Dole Foundation for People With Disabilities. The foundation, which raised about $1.25 million last year, is a bottomless pocket: Dole's supporters can give unlimited amounts at any time, and get a tax deduction to boot.
In accordance with the laws governing public charities, the foundation is ostensibly nonpartisan. To its credit, it is engaged in charitable works rather than the senator's political operations. But look closely at the list of foundation contributors. My analysis of public information shows that better than 65 percent of its backers also happen to be Dole campaign contributors. American Financial Corporation is a supporter, as is the Andreas Foundation and the Archer Daniels Midland Company. The Gallo Foundation is a contributor, as is US Tobacco. In its 1990 report, the foundation singled out Gallo, ADM, AT&T, oilman William Keck, and Massachusetts Mutual Life Insurance Co. for having been "exceptionally generous in support of its programs." All five also happen to lavish Dole with campaign support.
"To suggest ... some link between the Dole Foundation for People with Disabilities and politics is simply insulting,"Dole's spokesperson said. "Bob Dole has lived with a disability for 50 years. And the purpose of his foundation is to help others deal with the same kind of challenge." To be sure, it is entirely possible that all of the foundation's supporters simply like the foundation's good works. However, it is also likely some of them want Dole to like them.
Unlike the disabilities foundation, the Better America Foundation engages in political activities. Campaign America's director quietly set up the foundation in 1993, and it has received attention only recently. Technically a broad-based social welfare organization, the unit originally resided in Campaign America's office and is now under the direction of a senior Dole aide, Jim Whittinghill, who left the Senate payroll to head the organization. Last year, the Better America Foundation raised $4 million, according to its tax return.
As with Campaign America, Dole's only official position at the foundation is "honorary chairman." But last October, right before the elections, the foundation ran a series of television ads supporting the balanced budget amendment. Produced by a consulting firm with longstanding ties to Dole's presidential campaigns, the ads prominently featured Dole. In addition, there is considerable crossover between the foundation staff and Dole's circle of political advisers. The architect of the foundation was Jo-Anne Coe, the longtime Dole aide who helped manage his previous presidential and Senate campaigns and was running Campaign America when she set up the foundation. Another former Campaign America official is the foundation's finance director, while a former Republican National Committee aide and ex-Dole staffer is the group's political director. The foundation also uses the same polling firm as Dole's presidential campaign, Public Opinion Strategies, and the Associated Press reported that Whittinghill confirmed the foundation "solicits Dole's ideas, shares its work with him, and meets regularly with his Senate staff."
Absent evidence that the Dole campaign is coordinating campaign activities with any of these agents, none of this is illegal. If Dole happens to benefit from this arrangement incidentally, the law permits it, even though that effectively allows Dole's donors to circumvent limits on individual donations and direct extra money to his political cause. The purpose of those limits, of course, is to prevent legislators from serving the interests of their financiers rather than their constituents--which is what Dole apparently did when he acted on behalf of a failed natural gas subsidy three years ago.
DOLING OUT LEGISLATION
In September 1992, Dole won passage of an amendment renewing a generous tax credit called "section 29," which subsidized natural gas taken from geologic formations that are difficult to access. First passed in 1980 during the energy shortage, section 29 sought to foster American energy independence by spurring production of alternative fuels. Since Kansas is a major producer of natural gas, Dole's motives seemed obvious enough.
But were they? By the mid-1980s, a glut of natural gas had severely depressed gas prices. When the amendment was up in 1992, most senators from natural gas states--including Republican Don Nickles of Oklahoma and Democrat John Breaux of Louisiana, patron saints of the petroleum industry--wanted to kill the credit to discourage overproduction. The Natural Gas Supply Association, which represents 90 percent of the nation's natural gas suppliers, opposed the Dole rider, as did the American Petroleum Institute. Also against the program were the independent natural gas producers of Kansas, a consortium of smaller companies from Dole's home state.
But a handful of large companies with the resources to embark on these projects--Amoco, Arco, Coastal, and Enron, plus a few other large corporations with investments in drilling--were making a killing off the subsidy. Because the credit was so generous and the price of gas so low, the few companies producing the gas were getting a credit equal to about 92 percent of the price of the commodity they were producing. In other words, for every dollar of gas they sold, the companies also received 92 cents in tax credits.
By 1992, Coastal and Enron were banking heavily on section 29's renewal. According to World Oil, a trade magazine, the two companies had accelerated their efforts on drilling projects eligible for the subsidy. By the fall, the magazine said, section 29 covered 78 percent of Coastal's gas drilling and 80 percent of Enron's. Officials from Enron and Amoco, which also drilled hundreds of section 29 wells in 1992, told World Oil they would eliminate virtually all such projects in 1993 if the tax credit expired, because they would no longer be economical.
Amoco, Arco, Coastal, and Enron are all longtime backers of the Dole Foundation and Dole's campaigns. Since 1987, the companies' executives have given at least $48,000 to the Dole campaigns and more into the Dole Foundation. Coastal, in particular, has been extremely generous with its corporate jets, allowing Dole to use them four times in 1992 alone, including a trip to the Republican National Convention in Houston. Coastal CEO Oscar Wyatt held a $1,000-a-person fundraiser for Dole during convention week, where Enron executives gave at least $7,000, while Coastal officials put up at least $9,000.
Also profiting from section 29 was AT&T, which went into the gas business for the tax benefits. AT&T, it turns out, has given Dole at least $20,000 since 1987 through its PAC, while the AT&T Foundation has given Dole's foundation at least $100,000. Gerald Lowrie, AT&T's senior vice president for government affairs and the company's top lobbyist, serves on the board of the Dole Foundation and helps raise funds for the group.
Apparently, the investment caught Dole's attention. Dole brought his amendment to the floor in September 1992--only a month after the fundraiser at Wyatt's mansion. Dole contended the subsidy was vital to America's energy security, even though the nation then (as now) enjoyed an abundance of cheap fuel. Because the debate was so complicated and obscure, the press barely noticed. Nobody bothered to investigate whether "energy security" was the real explanation for Dole's motives.
Despite some substantial opposition--spearheaded by New Jersey Senator Bill Bradley--Dole prevailed on the Senate floor with support from Senators representing energy-consuming states whose citizens benefited from the low natural gas prices. The measure, however, died in the House-Senate conference committee, after conferees decided the government couldn't afford sustaining the giveaway.
ADM'S BUMPER CROP
A financier for whom Dole has delivered more tangible results is Dwayne Andreas, the CEO of agriculture giant Archer Daniels Midland.
Andreas has been a financial godfather to politicians of all ideological stripes for the last 25 years. He gave thousands of dollars to Hubert Humphrey, managed the late vice president's blind trust, and gave at least $70,000 to the children of Humphrey's top congressional aide, David Gartner. In 1974, Andreas made more than $100,000 in secret contributions to both Humphrey and Nixon, including $25,000 that went to the White House plumbers unit. The one constant in Andreas's life is that he gives money--lots of money--to whoever might be in a position to help his company, no matter what their politics. There's no mystery to this: As is widely known in Washington, ADM's success depends upon massive governmental favoritism toward its various enterprises, all of which are agriculture-based.
If few political financiers are better known than Andreas, few politicians have more conspicuously courted his favor than Dole. Since the two joined forces two decades ago, Andreas's money has found its way into virtually every pocket of Dole's money coat. In the last few years alone, ADM and Andreas family members have given Dole's foundation at least $185,000, and at least $53,000 more to his various campaigns.
In 1982, Dole and his wife bought a luxury condominium in Bal Harbour, Florida from a company controlled by Andreas for the bargain price of $150,000. The condo allows Dole to live the lifestyle of the rich and famous: Fellow owners include millionaire attorney Robert Strauss, broadcaster David Brinkley, and lobbyist Howard Baker, himself a former GOP Senate leader. "There appears to be little doubt that the Doles received preferential treatment from Andreas," the New York Times concluded after investigating the transaction in 1987. The paper found that a condominium of the same size but in a less desirable location of the building sold for $40,000 more than the Doles paid, just three months prior to the Doles' purchase. The senator has always denied any impropriety.
Then there are the campaign flights Dole gets on ADM's corporate jet. In the last six years, Dole has made 23 campaign flights aboard ADM's corporate jet, according to FEC records. The flights amount to contributions by ADM to Dole that would be illegal were they to be made in the form of cash. Exploiting a loophole in campaign finance law, Campaign America reimburses ADM for most of the flights at the rate it would cost the senator to fly first-class on a commercial airliner. That's a significant discount: Charter jets cost as much as $20,000 per trip for fuel maintenance, staff, and other costs, and rarely less than $5,000. At a conservative estimation based on the number of trips at a rate of $5,000 per trip (surely a low estimate) minus those reimbursements, ADM has made $90,000 in corporate contributions to Dole in this manner.
Andreas says he's not out to buy influence. ADM, he once told Fortune magazine, is the "most impotent political animal in the world." Dole, for his part, has always claimed Andreas is just a kindred spirit with a lot of money. As the representative of a farm state, Dole says, he just happens to favor programs that also benefit ADM. But under scrutiny, this claim too falls apart. On the issues Dole has championed, the interests of ADM and Kansas voters have often diverged.
Consider Dole's long-standing and controversial advocacy of ethanol, a corn-based product ADM has touted as a cleaner-burning alternative to gasoline. In 1990, Dole held a trade bill hostage until the House would agree to extend a tax credit for domestic production of ethanol and to place duties on imported ethanol. In 1991, Dole added an amendment to a highway bill that made it harder for refiners to supply petroleum distributors with methanol--the chief competitor of ethanol. In 1992, Dole jawboned the Bush administration into issuing new regulations, boosting the role of ethanol in the government's clean air program. In 1993, Dole pushed a Senate resolution encouraging President Clinton to endorse the Bush regulations. (Uncharacteristically, it lost). In fact, in virtually every session of Congress for the last decade, Dole has introduced legislation beneficial to ADM.
Though ethanol's environmental value remains unproven, Dole has always claimed the subsidies benefit his constituents, by increasing demand for Kansas-grown corn--an explanation the media and the public have apparently bought. But despite years of massive subsidization, no evidence exists that the ethanol program has raised corn prices significantly. Some economists say that even if ethanol production were to triple--and it would only grow 10 percent under the most generous government-subsidy scenario--the effect on corn prices would be minimal.
So who benefits from the subsidy? ADM, which controls two-thirds of the ethanol market. Last year, ADM produced some 900 million gallons of ethanol, reaping the lion's share of $500 million in government subsidies. Ethanol accounts for about a fourth of the company's earnings. Without the subsidy, the ethanol market would all but collapse. (Another fourth of ADM's earnings comes from high fructose corn syrup, a sweetener for which there also would be no market but for federal tariffs on imported sugar.)
Other large Dole financiers have benefited from Dole's work, too. Public records show that since 1987 Dole's biggest funders, the Gallo family, have given at least $193,000 in direct campaign contributions, not including the money donated to Dole's PAC and foundations. As the Los Angeles Times reported, Dole in 1992 used congressional oversight of the Treasury Department to fight off stricter labeling requirements on the imitation champagne Gallo manufactures. Dole has also opposed tax increases on alcoholic beverages, and in 1986 pushed through an amendment to the tax reform act which allowed the billionaire Gallo family and other super wealthy families to evade certain inheritance taxes on generation-skipping trusts.
Cincinnati billionaire Carl Linder, members of his family, and executives from the American Financial Corporation gave Dole about $34,000 for his 1986 Senate campaign, about $47,000 in 1987 for his presidential campaign, and at least $28,000 since then. Dole has also used the AFC corporate jet at least five times since 1989, FEC records show. Dole appears to have worked behind the scenes to preserve a dividend-received deduction that benefits AFC, and, as first reported in the Cincinnati Enquirer, Dole pressured the Clinton administration to protect Chiquita--an AFC subsidiary--in its trade disputes with Europe and Latin America.
THE TEFLON SENATOR?
Such relationships ought to raise at least a few eyebrows. But will they make a difference? Maybe not for Dole, who's already demonstrated a unique ability to avoid the taint of scandals to which he was connected. Putting aside the Federal Election Commission charges stemming from the 1988 presidential campaign--recall that the FEC required Dole's campaign to admit it broke the law--nobody seems to care about the relationship between Dole and David Owen, a longtime Dole fundraiser who served prison time for tax fraud and was accused (though never convicted) of illegal fundraising practices by the Kansas Public Disclosure Commission and state prosecutors.
Owen's ties to Dole go back at least to 1974, when Owen stepped down as Kansas lieutenant governor in order to rescue Dole's faltering campaign for a second Senate term. Owen was Dole's primary fundraiser for most of the 1980s, serving as a senior executive of Campaign America in 1986 and, for a time, national finance co-chairman of Dole's 1988 presidential campaign. He once estimated that he had raised more than $20 million for Republicans during his fundraising career, at least half of it for Dole.
Questionable dealings characterized their relationship. One early one that attracted FEC scrutiny involved a $50,000 loan Owen had engineered while he was president of a Kansas bank--a loan to Elizabeth Dole that was promptly funneled into Dole's 1980 presidential campaign. According to FEC staff investigators, Owen had structured the deal to appear that Mrs. Dole was lending her husband's campaign the money, when in fact it came from the bank. Although it would have been legal for the bank to lend the campaign the money directly, the campaign may not have had sufficient assets to justify it, raising questions of whether Owen was giving his ally Dole a sweetheart deal. Mrs. Dole's trust fund, meanwhile, was not liquid, so the only way to get the money from the bank to Dole was for Mrs. Dole to put up her trust as collateral, take out her own loan, and then give it to the campaign.
Correspondence between Owen and campaign manager Jo-Anne Coe, on file with the FEC, confirms the nature of the relationship. "Dear Jo-Anne: Please find enclosed note for Elizabeth Dole in the amount of $50,000, per your request," Owen wrote on a piece of bank stationery. He then asked the campaign manager for "instructions as to where you would like the money sent. If you prefer, I can wire transfer to your bank in Washington...." Coe promptly instructed Owen to wire the funds directly into the campaign's bank account, as the funds "are needed at the earliest possible time."
FEC staff investigators concluded that the transaction violated federal campaign finance laws, which require campaigns to disclose the true source of all loans and contributions. Yet the FEC ultimately dropped the case after deadlocking on a staff recommendation to pursue the case against Dole. The politically divided agency frequently deadlocks along partisan lines when a powerful politician from either party is involved.
Another episode involved arrangements Owen made after he became adviser to Mrs. Dole's $1 million trust in 1983--investments he engineered that relied directly or indirectly on government contracts, all secured with the assistance of Dole's Senate staff.
One of the most profitable of these deals was the purchase of an office building in February, 1986. The trust bought the building for $1.39 million, netting Owen a $139,000 commission, and then sold the building a year later, netting the Doles a $100,000 profit. So far, so good. But the new buyer was no stranger. Instead, the Doles had sold the building to a company called EDP enterprises, which was run by John Palmer, a former Dole aide. And at the same time EDP was buying the building, EDP had also won a $25 million minority set-aside contract (Palmer is black) from the Small Business Administration. EDP had pursued the contract unsuccessfully for at least a year; only after senior Dole aides intervened with the Small Business Administration did EDP get it. It turns out that Owen was a consultant to EDP, and that Owen owned a company that was one of EDP's major suppliers.
As word of this deal leaked into the press, Dole flatly denied any intervention with the Small Business Administration on behalf of Palmer. But the House Small Business Committee investigated and concluded that Dole personally had called the SBA's top official on Palmer's behalf. The committee also investigated whether EDP was a front company for Owen, and concluded that it likely was. Despite these findings, the Senate Ethics Committee never took action against Dole.
Dole eventually cut Owen loose when reports of Owen's involvement with the trust threatened Dole's 1988 presidential bid. But Owen's state officials later prosecuted Owen on tax fraud and political fundraising charges unrelated to the Dole campaigns or the EDPepisode. In 1993, a Kansas judge sentenced Owen to a year and a day in prison. Owen served six months, and was released in October 1994.
"Exhaustive investigations into the case found no wrongdoing on the part of Dole," a Dole spokesperson said. "Questions about the Owen affair are frankly disingenuous." But it is instructive to compare what is known about the the Dole-Owen affair with Whitewater, a potential scandal that has attracted considerable attention in the national media during the last two years. Which episode is more recent? Which politician made more money? Which politician took official action to help his benefactor?
Barring new revelations about Whitewater, the answers to these questions appear to be Dole, Dole, and Dole. Dole, though, had the good fortune of having his scandal disclosed just as his presidential campaign was faltering. He has faced no investigations or independent counsels, and the national press, thus far, has given him a free pass. To date, no full accounting of Dole's transgressions has appeared in the national media, despite numerous articles on his presidential candidacy.
Such is the state of contemporary reporting. Reporters pore over the record of a new figure like Newt Gingrich but leave unexamined and unremarked the two-decade history of a politician many consider the odds-on favorite to be our next president. The voters, meanwhile, have grown increasingly desensitized to charges of political corruption altogether.
In all fairness, there is some reason for disillusionment. Dole may be noteworthy for his ambition and brazenness, but his practices are not that atypical. Gary Hart and Jack Kemp had nonprofit think tanks, which like Dole's attracted money from their political contributors. Revelations about Gingrich's nonprofit foundation--which like Dole's had strong ties to his campaigns--forced the Speaker to sever his ties earlier this year. House Minority Leader Richard Gephardt maintains a political action committee that engages in many of the same practices as Dole's PAC. In the modern campaign arsenal, loosely affiliated PACs and nonprofits are essential weapons for officials with national ambitions.
Such is the reality of the privately financed campaign system, a system reformers have targeted for years. Perversely, the only campaign finance proposal to come up in Dole's Senate this year was the measure to abolish public financing in presidential campaigns, which would complete the regression of our campaign finance system to pre-Watergate days. The measure failed, but Dole's sponsorship of it is a measure of how much of an opponent of reform he really is.