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Clinton Presidential Records
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Speechwriting
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4
3
1
�issues, and I felt that winning that battle was a condition prior to being able to be reelected President. I felt that if he failed to win that fight, there was no way that he
would ever be re-elected.
84
Regarding whether the DNC issue advocacy advertisements would provide any benefit to the
President's re-election effort, however, Morris testified:
. . . at any point in a presidency, any advertising, any issue advertising the President
does whether for health care reform or for the stimulus package or to win the budget
fight would eventually accrue to his benefit in the reelection.
* *+
I believe that once we won the budget fight, first of all, it was a very important
victory for the party, it was a very important substantive issue the President was
heavily invested in, and I believe that winning that fight, itself, was a prerequisite to
being able to win the election.
85
Another manner of coordination between the White House, the DNC and Clinton/Gore '96
occurred through the same consultants' use of information obtained for each respective entity in the
planning and execution of advertisements.
While Morris testified that the consultant team
determined whether an advertisement was on behalf of the DNC or Clinton/Gore '96 based on the
results of mall tests and other forms of feedback, even the funding for these polls was shared
86
between the DNC and Clinton/Gore '96. In addition, while the nature of a particular advertisement
allegedly determined whether it was paid for by the DNC or Clinton/Gore '96, Morris conceded that
advertisements originally planned as DNC ads were switched to Clinton/Gore '96.
84
M a t p. 135.
85
Id. at pp. 293.
86
Id. at pp. 160-61.
87
Id. at pp. 157-60.
23
87
The
�88
advertisements were created in the same room, by the same consultants with identical information.
89
In fact, Morris often was unaware of which entity actually paid for advertisements; apparently such
distinctions were unimportant. Morris testified that the only thing separating DNC and Clinton/Gore
'96 materials "was a bright line running through the middle of our conference table of DNC versus
90
Clinton-Gore."
Morris testified that "[t]here was a review [of the polling] as to the extent to which it was
related to the reelection campaign or the Democratic Party generically, but all of it was treated as
political."
91
In fact, the only attempts to separate .the. polling data between the DNC and
92
Clinton/Gore '96 came after the polling was completed.
Morris understood that, after polls were
conducted, Ickes and Utrecht reviewed them and apportioned the cost between the DNC and
93
Clinton/Gore '96 based on the content of the questions.
Ickes apparently was aware that this close coordination in advertising and polling created
legal risks; indeed, he pressed Morris to sign an indemnification agreement so that Morris would be
responsible for any FEC fines. Morris testified:
Ickes was pressing for an indemnification . . . he wanted an indemnification where
basically, any violation that the FEC found, we would be indemnifying the campaign
and saying, "It's our fault guys." And what we were offering was an indemnification
Id. at p. 161.
89
Id. at pp. 279-80.
90
Id. at p. 161.
91
Id. at p. 90.
92
Id. at p. 90.
93
Id. at p. 91.
24
�where, if there was any FEC fine of the campaign that resulted from our refusal or
inability to produce documentation about the time buy that we would be liable, but
that if the FEC ruled that the underlying expenditures themselves were illegal under
FEC rule[s] and imposed a fine, we took the position that we were doing this
pursuant to the legal advice we were given from Sandler and Utrecht and the
instruction we were givenfromIckes to follow their legal advice, and therefore, there
was no reason for us to indemnify them.
94
White House Coordination in the Design and Implementation of Issue Advocacy Advertising:
The relationship between Morris and Bill Curry provides an example of the coordination
between the White House and the DNC and Clinton/Gore media consultants. Curry was the White
95
House staff member specifically hired to work with Motris- The President suggested that Morris
work with Curry to implement a "series of principles" to guide the President's "comeback in the face
96
of the Republican victory."
Morris made it clear to the President, however, that he "needed Curry
to work directly with [him] to implement the entire strategy, not just a piece of it." Morris testified
he and Curry:
would talkfrequently,and he would give me his thinking as to what he thought we
should be saying in our advertisements, and I would listen to it and I'd take account
of it, and I would - and it was one of a number of inputs I received on that.
97
In addition to the advertising and consulting work, Morris and Curry worked on Presidential
"policy initiatives," the President's position on issues of national concern, congressional strategies,
98
speech writing, polling results, and media plans on a regular basis.
Morris also testified that "a
94
Id. at pp. 361-62.
95
See Morris deposition, p. 72.
96
Dick Morris, Behind the Oval Office (1997), pp. 37-38.
97
See Morris deposition, p. 74.
98
Id. at pp. 73-74.
25
�number of people at the White House [and] at the DNC . . . participated at one point or another in
99
the process of thinking up ideas for a media."
As a result of the early advertising using Clinton/Gore '96 funds and the subsequent use of
DNC- funded issue advocacy advertisements,
Morris divided White House involvement in
campaign advertising into two distinct time periods: April 1995 through June 1995; and July 1995
,00
through August 1996.
From April through June 1995, the media consultants conducted polls and
created advertisements primarily for Clinton/Gore '96 because they had not yet adopted the concept
101
of using DNC funded issue advocacy advertising.
from July 1995 through August 1996, the
media consultants conducted polls and created advertisements using DNC funded issue advocacy
102
advertising and, to a limited extent, Clinton/Gore '96 funds. Thus, the coordination that occurred
between White House officials, the DNC, and Clinton/Gore '96 is analyzed in these distinct time
periods.
Morris testified that among the White House officials who primarily coordinated with the
DNC and Clinton/Gore '96 media consultants and representatives were: the President, the Vice
103
President, Leon Panetta, Harold Ickes, George Stephanopoulos, Erskine Bowles, and Doug Sosnik.
Morris described the involvement of each of these individuals as follows:
99
Id. at p. 76.
100
Morris resigned during the Democratic National Convention in August 1996 due
to a personal scandal. See Dick Morris, Behind the Oval Office (1997), pp. 33134.
101
Morris deposition, pp. 78-90.
102
Id. at pp. 125, 154-55.
103
Id. at p. 76.
26
�The President:
The President had significant involvement with the Clinton/Gore '96 and DNC media
consultants in the areas of polling, advertising, speech-writing, legislation strategy, and general
policy advice. The President: (1) reviewed, modified and approved all advertising copy; (2)
104
reviewed, adjusted and approved media time buys; (3) reviewed and modified polling questions;
105
and (4) received briefings on and analyzed polling results.
Indeed, a significant amount of the
polling work the consultants performed for the President "related to substantive issues in connection
with his job as President, but it [also] could be considered political."
106
The President wanted to keep total control over the advertising campaign designed by Morris
107
and the media consultants.
From May through June 1995, Morris testified that the President
108
"insisted on seeing every question before [the consultants] asked it in the questionnaire."
In
addition to the weekly strategy meetings, Morris met with the President privately to discuss the
109
media campaign.
For example, if the media team "had to do an ad and there wasn't a strategy
104
Time buys are the "list of markets . . . to buy ads in and how much you are going
to spend in each media market." Id. at p. 83. For example, at the March 2, 1995
weekly strategy meeting, the President decided Clinton/Gore '96 would pay for
the time buys during that period. Id. at pp. 84-86.
105
Id. at pp. 80-84.
106
M a t p. 81.
107
Id. at p. 167.
108
Id. at pp. 176-77.
109
Id. at p. 190.
27
�meeting scheduled conveniently," i.e., a rapid response to Republican advertisements, Morris would
110
schedule a private meeting with the President.
The President's participation began with initial discussions concerning the specific details
1
of DNC and Clinton/Gore '96 advertisements. " He would review the story lines and scripts and
2
occasionally make detailed and significant changes." Morris testified that the President was the
3
"day-to-day operational director" of the media campaign." The President "worked over every
script, watched each ad, ordered changes in every visual presentation, and decided which ads would
4
run when and where."" Morris further testified that the President "was as involved [in the DNC
and Clinton/Gore '96 media campaign] as any of his media consultants were," "[e]very line of every
ad came under his informed, critical, and often meddlesome gaze," such that "[t]he ads [for both the
115
DNC and Clinton/Gore '96] became . . . the work ofthe President himself."
From July 1995
through August 1996, Morris described the President's involvement in the media campaign as
follows:
The President would be heavily involved in the first issue, the discussion of the
strategy, and he would look at the ad - and we would present to him at each of these
strategy meetings the scripts of media that we wanted to run and the visuals, the
animatics that had been tested, and would brief the assembled group, which included
no
Id
in
Id. at p. 177.
112
Id.
113
Id. at pp. 182-83.
114
Id. at p. 183.
115
Id. at pp. 182, 183, 184-88, 189; see also Dick Morris, Behind the Oval Office
(1997), p. 144.
28
�the President and the Vice President, on the results of the mall test. And armed with
those results, looking at the visual and looking at the script, the President would
make fairly specific suggestions as to what he wanted or didn't want included in the
final ad.
We would then take those suggestions, and suggestions that were also made by all
the other people in the group in the room, including Senator Dodd and
Stephanopoulos and a bunch of folks, and we would then have a creative meeting,
which was a group meeting of the consultants, right after the-the day after the
strategy meeting.
116
Morris recounted a conversation with the President that demonstrates both the high level of
White House coordination with the DNC and Clinton/Gore '96 advertising and its true purpose of
supporting the President's re-election. Morris recalled a private Oval Office meeting with the
117
President to discuss the use of comments by Speaker Gingrich and Senator Dole in advertisements.
The President stated that he did not want to mn "the Dole Medicare quote in our national ad buy"
because he feared Senator Dole might lose the Republican nomination if he were associated with the
8
proposed Medicare reforms." Because the President and Morris wanted to run against Senator
Dole,
119
Morris wrote an advertisement that "in early November. .. featured Gingrich's quote but
not Dole's," and this advertisement ran "for three weeks in about 40 percent of the country during
120
the [federal govemment] shutdown."
116
See Morris deposition, pp. 168-69. Morris and the other consultants also assisted the
President with speech writing. Id. at p. 197.
117
See Dick Morris, Behind the Oval Office (1997), p. 184.
118
Id.
119
Id.
120
Id.
29
�Based on the evidence provided by Morris, it is evident that of all the White House officials
involved in the advertising campaign, the President himself was the most actively and intimately
involved.
The Vice President:
From April through June 1995, the Vice President was involved with the DNC and
Clinton/Gore '96 concerning polling, advertising, speech-writing, legislation, policy and general
121
advice to a lesser degree than the President. The Vice President reviewed, modified and approved
122
advertisements. From July 1995 through August 1996,.the Vice President attended all the strategy
123
meetings and would make suggestions to proposed advertisements.
In placing the level of
individual involvement in the media campaign and polling work on a scalefromone to 100 (with
100 representing the President's level of involvement), the Vice President's participation was
124
roughly 40 percent of the President's level of involvement.
Leon Panetta:
From April through June 1995, he had essentially the same involvement in the media
campaign as did the Vice President, which included polling, advertising, speech-writing, legislation,
121
See Morris deposition, pp. 187-88.
Id.
123
M a t p. 186.
124
Id. at pp. 187-88.
30
�125
policy and general advice.
From July 1995 through August 1996, Morris placed Panetta's level
126
of involvement at approximately 50 to 60 percent of the President's level of involvement.
Harold Ickes:
Morris believed that Ickes was in "minute to minute control over all field activities in
connection with the Clinton-Gore campaign or the DNC."
127
Morris understood that Ickes
essentially ran the DNC and, until Peter Knight arrived, he also ran the Clinton/Gore '96 re-election
128
campaign.
Morris testified that:
[ Ickes] was the one who had to approve any expenditure of money, and he
was the one who had to be informed of any "polling and had to be informed
of any media.
* **
I had the impression that he was in charge of every aspect of the campaign
except for the substance of the message which I was in charge of.
129
Regarding Ickes' involvement with the advertising campaign, Morris testified that, from
April through June 1995, Ickes had approximately the same level of involvement in the media
130
campaign as did the President.
Ickes did not havefinalapproval (as the President did) and made
fewer substantive changes than the President, but he "focused with greater scrutiny than the
125
Id. at pp. 95-96.
126
Id. at p. 188.
127
Id. at p. 236.
128
Id.
129
Id. at pp. 236-37.
130
Id. at p. 96.
31
�131
President on the amount and the distribution ofthe time buy."
For example, Ickes approved every
132
questionnaire, script, time buy or other campaign expenditure.
He also chaired all the meetings
with Sandler and Utrecht in which it was determined whether an advertisement should come from
the DNC or Clinton/Gore '96.
133
In addition, Ickes was "heavily involved" in discussions
concerning how much to spend on advertising and whether the President should accept Federal
matching funds.
134
From July 1995 through August 1996, Ickes' level of involvement was roughly
135
10 to 20 percent of the President's level of involvement in the advertising campaign.
George Stephanopoulos:
Stephanopoulos was a senior White House advisor. From April through June 1995,
136
Stephanopoulos did not have any significant involvement in the media process. He became more
involved in September of 1995 and remained actively involved through Morris' departure from the
137
campaign in August of 1996.
On behalf of both the DNC and Clinton/Gore '96, he reviewed
advertising copy before it was approved and suggested changes to advertising visuals and advertising
138
themes.
He also was in charge of the vetting process for factual accuracy for both DNC and
131
Id.
132
Id. at p. 221.
133
Id.
134
Id. at p. 97.
135
Id. at p. 188.
136
Id. at p. 101.
137
Id. at p. 103.
138
Id. at p. 101-02.
32
�139
Clinton/Gore '96 advertisements. Beginning in May 1995, Stephanopoulos played a greater role
in reviewing the polling conducted by Morris.
140
By September 1995, Stephanopoulos' role
"evolved to a point where he received all questionnaires in advance and approved the questions and
141
frequently made suggestions for modifications, additions, or deletions."
Morris also called
Stephanopoulos "[e]ach morning at seven-twenty . . . with the data from the previous night's
interviewing so he could report to the daily seven-thirty meeting that Leon [Panetta] held with the
142
top White House staffers."
From July 1995 through August 1996, Stephanopoulos' level of
involvement was roughly 70 to 80 percent of the President's level of involvement in the media
143
campaign.
Erskine Bowles:
Bowles was a White House deputy chief of staff (and now serves as chief of staff). He
144
attended the weekly strategy meetings and acted as a liaison between Morris and the President.
Bowles also supported Morris' view that advertising should not be conducted on a piecemeal
145
basis.
At Bowles' suggestion, Morris divided the advertising plan into four components, each
139
Id at pp. 102,106, 170.
140
Id at p. 107.
141
Id.
142
See Dick Morris, Behind the Oval Office (1997), p. 183.
143
See Morris deposition, p. 188.
144
Id at p. 110.
145
Id. at p. 111.
33
�costing approximately $10 million.
146
From July 1995 through August 1996, Morris placed
Bowles' level of involvement at roughly 10 to 20 percent ofthe President's level of involvement in
147
the media campaign.
Doug Sosnik:
From July 1995 through August 1996, Sosnik's level of involvement was roughly 30 to 40
148
percent of the President's level of involvement in the media campaign.
The President and Vice President Agreed to Limit the Amount of Money They Would Spend
on Their Campaign, and the Violation of That Agreement May Constitute a Violation of
18 U.S.C. § 371
In addition.to the White House's coordination with and control of the DNC in producing and
paying for ads containing electioneering messages on behalf of the President's reelection, there is
a question as to whether the fundraising and expenditures necessitated by the desire to run those ads
149
constitute a "conspiracy to defraud the government."
Under the FECA, a presidential candidate who accepts federal matching funds cannot exceed
150
the applicable expenditure limits for his campaign. To ensure that the statutory scheme and its
146
Id.
147
Id. at p. 188.
148
Id.
149
Under 18 U.S.C. § 371, "[i]f two or more persons conspire either to commit any
offense against the United States, or . . . to defraud the United States, or any
agency thereof, and commit an overt act in furtherance of the conspiracy, then
they have committed a federal criminal offense" (emphasis supplied).
150
26 U.S.C. § 9035. The expenditure limits are set out at 2 U.S.C. § 441a(b)(l)(A).
34
�purposes are complied with, the FECA requires that candidates who receive matching funds under
26 U.S.C. § 9037 certify that they will not exceed the FECA expenditure limits.
151
Here, the certification was made, and the govemment wrote its check only after being told
that what in fact was already occurring (the raising and spending of private money) would not occur.
The foresworn fundraising and spending was undertaken using the DNC as a conduit.
As pointed out above, the intent of the FECA in providing limited federal funding is to
remove the candidate from the fundraising process and to prevent the raising of large private
campaign contributions. The deal the taxpayers make with the candidate is that in exchange for their
funding, the candidate will forswear outside money, thereby making it less likely that the election
will be influenced or appear to be influenced by big money. Obviously, in the matter before us, the
clear purpose of the law was circumvented. If a candidate can easily circumvent those limitations
through coordination with a third party, such as by raising unlimited sums for a party committee the
candidate controls, that objective of the statute is completely undermined.
The "defraud the United States" portion of section 371 of title 18 is broad in scope and is
applicable to any activity that has the effect of defrauding the govemment. This is the case even if
no other criminal statute has been violated. In other words, under section 371 even an act that is not
itself a violation of any statute can result in criminal liability if the govemment is defrauded.
Accordingly, the quotation attributed to Attorney General Reno that "a conspiracy has to be a
152
conspiracy to violate specific laws" is incomplete.
That statement may be correct in regard to the
151
26 U.S.C. § 9033(b).
152
David Johnston, "Campaign Finance: Wider Implications; Justice Dept. Reopens
Campaign Plot Case," The New York Times, December 11, 1997, p. A24.
35
�portion of section 371 dealing with conspiracy "to commit an offense against the United States," but
apparently does not address the conspiracy "to defraud the United States," which is the other portion
of section 371. So even though it appears that the FECA may have been violated, even if the FECA
was not violated, the activity at issue may still constitute a conspiracy to defraud the United States.
For instance, in United States v. Touhev.'" the court decided a case in which the defendants
conspired to gain control of a bank without reporting the transaction to the FDIC. Because each coconspirator purchased less than 10% of the bank's stock, the group thereby evaded the reporting
requirement. Violations of the reporting requirements carry only civil, not criminal penalties. The
court held that the defendants' acts defrauded the govemment by interfering and obstructing the
FDIC's lawful govemment function of administering the banking laws. Therefore, criminal
sanctions were imposed even though the underlying acts were not criminal violations.
The Supreme Court has read section 371 even more broadly. It has consistently held that the
participants in a conspiracy need not conspire to violate any particular criminal or civil statute if they
154
conspire to defraud the govemment. In the leading case, Dennis v. United States. the defendants
submitted false affidavits to the NLRB purporting to satisfy the requirement of federal labor law that
union officials not be members of the Communist Party. Such an affidavit was required to be filed
before the union could call upon the NLRB to investigate charges. The defendants were alleged to
have falsely certified that they were not Communist Party members. The govemment charged the
defendants with conspiracy to defraud the NLRB under section 371.
153
867 F.2d 534 (9th Cir. 1989).
154
384 U.S. 855 (1966).
36
�The Supreme Court found that, unable to secure the benefits of the NLRB without submitting
non-Communist affidavits, the union officers deliberately concocted afraudulentscheme. In
furtherance of that scheme, they submitted false affidavits, and then used the NLRB facilities made
available to the union.
155
The Court held that such a scheme was a conspiracy to defraud the United
States, whether or not the affidavits were themselves violations of the false statements statute. As
the Court found, section 371 covers "any conspiracy for the purpose of impairing, obstructing or
156
defeating the lawful function of any department of Government."
For the Court, the key facts of
the conspiracy in Dennis were "that petitioners and their co-conspirators could not have obtained the
Board's services and facilities without filing non-Communist affidavits; that the affidavits were
submitted as part of a scheme to induce the Board to act; that the Board acted in reliance upon the
fact that affidavits were filed; and that these affidavits were false. Within the meaning of section
157
371, this was a conspiracy to defraud the United States or an agency thereof."
The advertisements themselves may be specific and credible evidence that overt acts were
carried out in support of the conspiracy to evade the expenditure limits and other FECA
requirements. The resulting interference and obstruction of the FEC's lawful function of
administering the election laws as a result of either a civil or criminal violation of the FECA may
form the basis for a criminal conspiracy to defraud the govemment under section 371.
158
155
Mat p. 861.
136
Id.
157
Id. at p. 862.
158
In the most famous example of an attorney general's use ofthe discretionary
provision of the Independent Counsel Act, Attorney General Meese sought the
appointment of an independent counsel to investigate Col. Oliver North. The
37
�As far as the President's use of the DNC to run the money through, a person cannot protect
himself from liability by doing something in another's name that he is not allowed to do himself.
Direct criminal prohibitions are not skirted through indirect violation. Whittaker v. Whittaker
Also, "[mjen must tum square comers when they deal with the Govemment." Rock Island
160
& L.R.R.. Co. v. United States.
Ordinary American citizens dealing with the Intemal Revenue
Service, for example, come to leam this quickly. Under our system of law, the same obligation is
placed on the President.
Coordination Between the DNC, Clinton/Gore, the White House, and Union Organizations
Morris testified that in August 1995 Ickes organized and chaired a White House meeting
in the Roosevelt Room between representatives of the DNC and Clinton/Gore '96 media team and
161
approximately seven representatives of various labor unions.
Morris recalled the meeting was
attended by, among other individuals, representatives of the National Education Association, the
American Federation of State, County, and Municipal Employees, the American Federation of
immediate issue presented in that case was whether any criminal law may have
been violated by Col. North's diversion of CIA funds to the Nicaraguan contra
rebels in light of the Boland Amendment which prohibited the use of CIA funds
for that purpose. Violation of the Boland Amendment carried no civil or criminal
penalties.
159
639 F.2d 516 (9th Cir. 1981) (corporate insider violates section 6(a) of the
Securities Act of 1934 by purchasing company stock for his mother's account
over which he "exercised complete control" and selling stock for his own account
within six months; this prohibition applies to such person's transactions "for his
benefit").
160
254 U.S. 141, 143 (1920).
161
Id. at pp. 216,223.
38
�162
Labor-Congress of Industrial Organizations, Sosnik, Stephanopoulos and Ickes.
During the
meeting, both the union representatives and the DNC and Clinton/Gore '96 media team displayed
advertisements each had run or were considering running.
163
Morris testified that the union
representatives:
spoke in tum about what their media plans were that they were planning to advertise
in States of Republican Senators, they were going to spend $1 million over the course
of the next year on doing it, here are the ads they had already run, here were the ads
that they were about to run. It was a full briefing of us by them on their media
plans.
164
Morris testified that the union representatives "suggested to us [Clinton/Gore '96 and the
DNC consultants] that there be coordination of the advertising . . . issue-oriented ads about the
165
budget."
Morris also recalled the union representatives suggesting Clinton/Gore '96 should run
advertisements in states where the unions were not advertising and, in particular, he recalled the
following specific suggestion of coordination:
And I remember in particular they said, for example, we're going to be on in
Vermont to go after Jeffords, and you don't care about winning Vermont politically,
so we'll do Vermont and you don't.
166
While Morris could not recall the name of the individual who suggested the coordination, he
believed it may have come from the union representatives' time buyer (possibly affiliated with Vic
162
Id. at pp. 216-17.
163
M a t p. 217.
164
165
166
Id. at p. 222.
M a t p. 217.
Id.
39
�167
Fingerhut's agency).
168
Morris testified that Ickes was in favor of the coordination.
In contrast,
Morris testified that he rejected a coordinated advertising effort between the White House, the DNC,
Clinton/Gore '96, and the unions because he believed the union's media strategy was flawed.
169
Conclusion
One does not expect govemment officials, with salaries paid by the taxpayers, to manage
directly the day-to-day operations of a political party. Yet that is precisely what happened in 19951996. Ickes ran the DNC as the President's "designee."
The White House's unprecedented level of control over the DNC arose because the DNC was
not in any sense independent from the President's re-election effort; the DNC was merely a vehicle
forfinancingMorris' advertising blitz. With the Democratic Party serving primarily as a re-election
vehicle, the President wanted control. Ickes obliged that desire, and Fowler was unable to go over
Ickes' head, because Ickes was merely doing the President's bidding.
The nation's oldest political party simply became an arm of the White House with the
primary mission of re-electing the President. The illegalities and improprieties discussed in this
report stem from this simple fact. The President's attempt to slough responsibility for illegal and
improper fund-raising by the DNC in 1995-96 by pinning blame on "the other campaign" rings
hollow in the light of the facts uncovered by the Committee's investigation and outlined in this
report.
167
Id. at p. 222.
168
Id. at pp. 222, 224.
169
Id.
40
�The DNC Dismantled Its System for Vetting Contributions
As the DNC tried to slake the White House's historic thirst for campaign cash, it dismantled
its system for reviewing contributions. The Committee concludes that the DNC, at a minimum,
operated with a conscious disregard for the legality of contributions during the 1996 election cycle.
Simply stated, the DNC knew how to implement procedures reasonably calculated to diminish the
risk of accepting illegal or inappropriate contributions. The DNC had such procedures in place
before the 1996 election cycle, and the DNC has such procedures now. Yet during the 1996 election
cycle, the DNC did virtually nothing to screen significant contributions.
The 1992 Vetting.System
The DNC was not always indifferent to the legality and appropriateness of large
contributions. In preparation for the 1992 election cycle, Rob Stein, a DNC consultant, and later
Ron Brown's Chief of Staff at the Department of Commerce, worked with then-DNC General
1
Counsel Carol Darr to ensure that the DNC had an effective procedure in place to vet contributions.
Darr, who had worked on the 1988 Dukakis presidential campaign, wanted to institute a system at
the DNC resembling the one used by the Dukakis campaign. Darr and Stein thus met with Dan
2
Small, who had been in charge of vetting for the Dukakis campaign.
Following this meeting, the DNC implemented a system similar to the Dukakis campaign's
for vetting contributions over $10,000. Any check for $10,000 or more was to go through a vetting
3
desk. This desk was supervised by Barbara Stafford, an attorney in the DNC's Office of General
1
Deposition of Robert J. Stein, June 17,1997, p. 5 7.
2
Id at p. 58.
3
Id.
�Counsel. Stafford had full-time responsibility for vetting contributions, as did her assistant, David
4
Blank. In fact, the 1992 vetting system involved an entire group of DNC staff, usually numbering
5
between six and 10, who did nothing but vet major contributions. Current DNC Deputy General
Counsel Neil Reiff has confirmed to the Committee that there was once a separate "unit" of about
6
seven or eight people, supervised by Barbara Stafford, that vetted checks. Likewise, current DNC
General Counsel Joseph Sandler testified that "for the 1992 election a procedure know as Major
7
Donor Screening Committee" was in place.
In short, the 1992 vetting system involved a special yetting desk, staffed by six to 10 people,
directly supervised by the DNC's Office of General Counsel.
1994: Vetting Fades
Carol Darr and Barbara Stafford were no longer in the Office of General Counsel during the
1994 election cycle. Darr's replacement, Sandler, was apparently somewhat less concerned with
vetting contributions. Unlike the old vetting desk, supervised directly by the Office of General
Counsel, the DNC began to rely on a less formal system involving one member of the DNC's Office
of General Counsel and the part-time efforts of one member of the DNC's Research Division, Rumi
4
M a t p. 81.
5
Deposition of Melissa A. Moss, June 11, 1997, pp. 12, 17.
6
Deposition of Neil Reiff, June 20, 1997, p. 30.
7
Deposition of Joseph E. Sandler, May 15,1997, p. 47.
2
�Matsuyama, who was charged with helping DNC Deputy Counsel Neil Reiff vet checks larger than
$25,000.'
Matsuyama would receive a check and an attached form, entitled "Major Donor Screening
9
Form," from Reiff. She would then perform a NEXIS search using the information on the form;
relevant information would be downloaded. In addition, she would search a CD-ROM of Federal
Election Commission records to ascertain whether the donor made other, presumably legal and
10
appropriate contributions. She would then prepare a memorandum summarizing her research."
The memorandum, as well as the downloaded research, was attached to the Major Donor Screening
Form, which was the same or substantially similar to the form used by the DNC's vetting desk in
12
1992, and all of these documents were returned to Reiff. Reiff would then review the information
13
and decide whether the DNC should accept and deposit the contribution.
Matsuyama testified that she spent approximately five to 10 hours a month performing this
14
vetting function; the remainder of her time was spent researching political issues. She left the DNC
8
Deposition of Rumi Matsuyama, June 10, 1997, p. 21; see also Reiff deposition,
p. 37.
9
See, e.g.. Major Donor Screening Form dated May 24, 1993 (Ex. 1); Major Donor
Screening Form dated April 17, 1993 (Ex. 2).
10
Matsuyama deposition, pp. 11-13.
11
Id. at pp. 14, 39.
12
Id. at pp. 13-14, 39.
13
Reiff deposition, pp. 27-28.
14
Matsuyama deposition, pp. 7, 22.
3
�15
in May 1994.
She was not replaced, and the check-vetting process for large contributions
essentially ceased.
The 1996 Elecrion Cycle: What Really Happened?
The Committee's search for information about the DNC's vetting procedures following
Matsuyama's departure in May 1994 was difficult. In many respects, the Committee could leam
little more than DNC National Chairman Don Fowler could:
Q: What was your reaction to the vetting process that had been in place once
that was explained to you?
A: Well, at that point, it became ~ it was reasonably clear that we should
explore some more thorough vetting process than we had, more systematic vetting
process, and we put that in place.
* **
Q: And were you told during that explanation that in about the summer of
'94, the DNC changed its process of doing Lexis-Nexis research on potential
contributors?
A: I was told that the prior process was suspended and that the
responsibility was given to the Finance Division. I think we're talking past each
other. I don't think ~
Q: I think we're talking about the same. And how was it explained to you
that the Finance Division carried out its vetting process?
A: There was a lot of vagueness there.
Q: Did you press for specifics in asking that question?
16
A: Yes, and there were no specifics available.
15
Id. at p. 6.
16
Deposition of Donald L. Fowler, May 21, 1997, pp. 348, 350.
4
�The Committee encountered similar difficulties in trying to find out what vetting procedure,
if any, was in place during the 1996 election cycle. As will be seen, much of the uncertainty stems
from the testimony of those who should have been most responsible for ensuring that an adequate
vetting procedures existed -- the staff of the DNC's Office of General Counsel. The conclusion the
Committee reaches is essentially the same as that reached by the DNC's National Finance Director,
Richard Sullivan, who testified that it was his view that there was "a poor compliance system and
no legal vetting."
17
Two self-serving explanations have been offered by wimesses associated with the DNC's
Office of General Counsel for the absence of any vetting procedures during the 1996 election cycle.
First, Joe Sandler and Neil Reiff essentially tried to shift blame to the Finance Division for poor
vetting, by asserting that the vetting function had been transferred to that division. Second, they
engaged in historical revisionism, attempting to segregate vetting for "legality" from vetting for
"appropriateness," and then asserting that the 1992 and 1994 procedures ~ which plainly collapsed
in 1996 -- related only to "appropriateness" vetting, while "legality" vetting continued throughout.
At every tum, Sandler and Reiff attempted to exculpate themselves from any responsibility for
failing to catch the approximately $3 million in illegal and inappropriate contributions that the DNC
18
has itself returned.
17
Deposition of Richard Sullivan, June 25, 1997, p. 120.
18
According to a June 27, 1997 DNC press release, the DNC had by that date
returned $2,825,600 in suspect contributions accepted during the 1996 election
cycle. The DNC has failed to return other contributions of questionable legality.
See, e.g., the section of this report on the contributions of Ted Sioeng, his family,
and related business interests.
�The Explanation that Vetting was Transferred to the Finance Division
At first, based on the sworn testimony of DNC officials, the Committee believed it would
leam that someone within the DNC's Finance Division had taken over Matsuyama's responsibilities
for researching contributors for purposes of vetting major contributions. During the first day of his
deposition, Sandler testified that "as of when Matsuyama left the DNC ... a Nexis account number
was given to the Finance Division, and ... the Finance Division used that Nexis account from time
l9
to time ... to screen donors ...." Likewise, Sandler's deputy, Reiff, testified that "we approached
Jeff King as a staffer on thefinancedepartment at the time, and ... my recollection is that he did
20
agree in principle, to do this function of research." Reiff further testified that, at a meeting he
attended with King, "[m]y impression essentially was that thefinancedepartment in principle said
they would do this function of research to continue some type of appropriateness vetting for
21
donors."
This testimony was only partially truthful. The Committee concludes that, although there
was discussion of moving Matsuyama's research function into the Finance Division, and although
19
Deposition of Joseph E. Sandler, May 15, 1997, p. 59.
20
Reiff deposition, pp. 39-40.
21
Id. at p. 41. Reiff also told B.J. Thomberry, the DNC's Chief of Staff, that "the
vetting responsibility was moved to Finance" when Matsuyama left the DNC.
Deposition of B.J. Thomberry, May 20, 1997, p. 78. Thomberry, who was
attempting to respond to press inquiries, investigated the DNC's vetting
procedures on her own during the fall of 1996. She concluded that "while the
function was transferred to Finance, that clearly, if it was happening, it was
happening on an episodic basis and it never became standard operating
procedure." Id. at p. 79. The basis for this conclusion was that "we were in the
midst of beginning to return checks that had clearly not gone through any quality
control procedures." Id. (emphasis added).
�a Finance Division staffer originally agreed (subject to the approval of his superiors) to have a
particular Finance Division employee perform that research, the employee who was to perform the
research was laid off within a matter of days and the research function was never assumed by the
Finance Division. Thus, the Finance Division never performed the research that Matsuyama
previously undertook, and the DNC's Office of General Counsel simply fell out of the process of
automatically reviewing major, new contributions.
The Committee's conclusion is based on the testimony of Jeff King, who primarily handled
operations issues within the Finance Division. He rebutted the attempt to shift responsibility to the
Finance Division for the dismantling of vetting procedures by establishing that Reiff knew that the
Finance Division had not undertaken the vetting function. King testified that he had a meeting with
Reiff (and others) about the time that Matsuyama left, and in the course of that meeting King agreed
to have Nicole Hecker, a Finance Division employee, perform the Nexis searches — so long as
22
23
King's superiors agreed. Shortly after that meeting, the DNC laid off Hecker. As a result, "the
24
whole process never was implemented." After Hecker's layoff, it was clear to King that the
25
Finance Division could not assume the responsibility of conducting the NEXIS research. More
telling, King had a phone conversation with Reiff within six weeks of King's deposition, in which
Reiff acknowledged that "he knew [the Finance Division] just didn't have the manpower to do what
22
Deposition of Jeffrey King, June 26, 1997, pp. 18-19, 23-24, 43.
23
Id. at pp. 24, 43.
24
Id. at p. 29.
25
Id. at pp. 30, 43-44.
7
�26
was necessary and that [it] certainly did not have the resources to do it." Thus, Reiff later admitted
that he knew that the Finance Division was not undertaking the research associated with vetting
contributions.
Richard Sullivan, the DNC's National Finance Director, confirmed King's account. Sullivan
testified that he was never aware of any shift in responsibility for performing vetting research from
27
the Office of General Counsel and Research Division to the Finance Division. It was always
28
Sullivan's understanding that the General Counsel was responsible for screening contributions.
Sullivan, the highest-ranking paid employee of the Finance Division, agreed that it was not
conceivable that the Finance Division would assume responsibility for check vetting without his
29
knowing about it. When Sullivan first heard the suggestion that the responsibility had been shifted
to the Finance Division, he investigated and could not find any individual within the Finance
30
Division who was aware of such a shift in responsibility. During 1997, however, he did leam from
Jeff King that King had met in 1994 with Reiff and Sandler, and they discussed the possibility of an
individual with the Finance Division assuming responsibility for screening in the light of DNC
layoffs; however, King informed Sullivan that the individual (Hecker) had left within a few days of
26
Id. at p. 31; see also id. at pp. 30, 44.
27
Deposition of Richard Sullivan, June 5, 1997, pp. 124, 128.
29
Id. at pp. 120-21, 129-30.
29
Id. at pp. 128-29.
30
M a t p. 129.
8
�the meeting, and King "told the people that were in the meeting with him that [the Finance Division]
31
couldn't take that responsibility, so that [it] never took that responsibility."
32
In addition to his pre-deposition admission to King, there is other evidence that ReifFknew
that the DNC had stopped researching new contributions. He testified that he would review about
33
five to 10 Major Donor Screening forms per week when Matsuyama was still a DNC employee.
34
After she left, Reiff testified that "the [vetting] process that I knew, that I was running, was over."
Reiff simply was "no longer involved in the vetting of donors for appropriateness at that point."
35
At no point did Reiff testify as to any personal awareness that someone else was conducting the
review of research materials that he had once conducted, nor did he testify that he trained anyone
within the Finance Division to perform that review.
To the contrary, Reiff testified that Scott Pastrick, the DNC's Treasurer, "complained to me
36
that there was no process within the finance department" for vetting. Reiff recalled that this
37
conversation took place in the summer of 1996. If the DNC's Treasurer ~ a volunteer, part-time
officer -- could discern that the Finance Division was not vetting contributions, it strains credulity
to suggest that the DNC's Office of General Counsel truly believed that research for purposes of
31
M a t p. 133.
32
See supra, text accompanying note 26.
33
Reiff deposition, p. 36.
34
Id. at p. 43.
35
Id.
36
Id. at p. 50.
37
Id.
9
�38
vetting was being carried out by the Finance Division. In fact, the candor of both Sandler's and
Reiff s claim that the Finance Division had agreed to assume the vetting research is called into
38
Pastrick testified that he spent "about eight or ten hours a week" at the DNC's
offices. Deposition of Robert Scott Pastrick, May 7, 1997, p. 46. The office of
treasurer was voluntary and unpaid. Id. at p. 8.
Interestingly, one of the primary functions of a national committee
treasurer is to sign the committee's FEC reports. See Deposition of Richard
Sullivan, June 4, 1997, pp. 46-47. Under federal election laws, only the treasurer
or an assistant treasurer may sign the FEC reports. 2 U.S.C. § 434(a)(1) (treasurer
must sign); 11 C.F.R. § 102.7(a) (assistant treasurer acceptable). Pastrick never
signed an FEC report on behalf of the DNC. Pastrick deposition, p. 15. Richard
Sullivan's recollection of Pastrick's explanation for this is interesting:
Q: Well, tell me what he [Pastrick] said in those conversations.
A: He said that he wasn't ~ he said that he was told by Brad
Marshall PNC Chief Financial Officer] and Joe Sandler that he was not
allowed to sign the FEC reports.
Q: Did he say why they had told him that?
A: He said that he had a - I think I remember, you know,
insinuating or saying that they may not have wanted him to be a witness to
the spending report side of it.
Q: Did he indicate what that was that they didn't want him to be a
witness to the spending?
A: As I recall, he may have ~ as I recall, he talked about the fact
that they may have been spending money, making expenditures that if he - that they didn't want him to know about. My sense was ~ and I don't
recall if he — my sense of it is, and memory — I don't recall vividly him
saying this, is that, you know, they may have been giving contributions to
certain campaigns or they may have been ~ expenditures that they just
didn't know that -- just didn't want him to know about.
And, again, my memory of it is that there may have been
expenditures that they didn't want Scott to know about because Scott
might tell people in the White House, Harold [Ickes] or Doug [Sosnik].
Deposition of Richard Sullivan, June 4, 1997, pp. 48-49; see also id. at pp. 53-57.
Sandler acknowledged that Brad Marshall, the DNC's Chief Financial Officer,
was "the designated assistant treasurer for FEC purposes." Deposition of Joseph
E. Sandler, August 21, 1997, p. 38. Sandler denied, however, that he ever told
Pastrick that he was not allowed to sign FEC reports. Id. at p. 47.
10
�question by Reiff s own testimony strongly implying that both Sandler and he were aware that
39
vetting had essentially "ended," and that this concerned both of them.
39
Reiff testified as follows:
Q: I also want to be clear. I think you answered before, but I want
to make sure we are clear on it.
After the meeting with Mr. King, you don't recall having any
conversation with anyone at the DNC about what's going on with this
appropriateness screening other than the Pastrick conversation and up until
the press reports?
A: I don't specifically - 1 am sure over a period of time I probably
expressed disappointment to Joe [Sandler] again as we went along. I don't
know how many times, if I did it or not, but I'm sure I felt disappointed
right after it happened in terms of 1994. But no, I have no other
recollections of any other conversations.
Q: What was Mr. Sandler's reaction when you expressed that to
him?
A: I can't tell you anything specific. I don't recall anything
specific, but I think we were both generally disappointed that the process
ended, the one that I was running. That's pretty much all I can tell you
about that.
Q: Did you suggest to Mr. Sandler he bring it up with the higherups at the DNC?
A: My impression is that I did. I couldn't tell you when, how
many times, but my impression is I probably mentioned it on a couple of
occasions.
Q: What was his reaction to that?
A: My impression, again, not remembering specifically, I'm sure
he expressed support of my view, but I never asked him ~ I don't recall
ever asking him specifically whether he asked or what the response was to
his request.
Q: As you sit here today, do you know whether he brought the
issue up with anyone in the management structure of the DNC?
A: No, I don't really know anything about that. I don't recall him
relaying any information back to me, for that matter.
Reiff deposition, pp. 68-70 (emphasis added).
11
�King appears to have been worried that the DNC and its outside law firm would nevertheless
exploit his 1994 meeting with Reiff and others in an attempt to heap blame on him for the DNC's
inadequate vetting. According to Sullivan, King told him that Debevoise & Plimpton, the DNC's
outside law firm, had "summoned" King to come talk to them about the subject of vetting, and King
"stated that he felt like the blame for all of this was being placed on his shoulders because of this one
meeting ...:
,A0
King told Sullivan that he (King) "felt like they were trying -- that the DNC,
41
Debevoise & Plimpton were trying to blame him." In his deposition, though, King denied telling
Sullivan that King believed that the DNC or Debevoise & Plimpton were trying to pin blame on him,
42
characterizing Sullivan's sworn testimony as "inaccurate." King later admitted, however, that he
was "concerned" that an apparently incomplete memorandum in the DNC's files could be
misinterpreted as stating that the Finance Division had assumed the NEXIS research responsibility,
43
44
when, in fact, it had not. King testified that he might have shared this concern with Sullivan.
4 0
Deposition of Richard Sullivan, June 5, 1997, p. 135.
4 1
M a t p. 139.
4 2
King deposition, pp. 36-38.
4 3
Id at pp. 46-47; MemorandumfromJeff King to Stephen Goodin, June 7, 1994
(Ex. 3).
44
King deposition, p. 47. Sullivan generally shared King's concern about the
DNC's outside law firm, as Sullivan testified that, in his own meeting with
Debevoise & Plimpton lawyers shortly after the election, the tone of questions
addressed to him about vetting procedures at the DNC was "accusatory," and he
had the "sense" that Debevoise & Plimpton wished to lay blame at his feet.
Deposition of Richard Sullivan, June 25, 1997, pp. 115-16. Sullivan went on to
add that he felt that the Debevoise & Plimpton lawyers "knew who they
represented and who they didn't." Id. at p. 116. He continued:
They represented the DNC as an instimtion, and the DNC officers,
12
�In fact, Reiff also testified that he "got the impression that he [King] was concerned about being
43
blamed about something."
Whatever effort may have been made by the staff of the DNC's Office of General Counsel
or the DNC's outside law firm to blame the Finance Division, the evidence is overwhelming that the
Finance Division never in fact undertook to perform the limited vetting research previously done by
Matsuyama, and that the Office of General Counsel knew this. The DNC's vetting process simply
was allowed to collapse. While many expressed concerns about the collapse, no one thought to
restore the vetting process, as that might slow or limit the money flowing to the DNC.
The Explanation Distinguishing Between Vetting for "Appropriateness" and "Legality"
Another supposedly exculpatory contention made only by Sandler and Reiff is that the DNC
did not dismantle its system for vetting contributions for "legality." To make this contention,
Sandler and Reiff asserted that vetting for "legal" issues was always the responsibility of the
Fowler, Dodd, and they ~ you know, and they conveyed the sense that
they - they conveyed the sense, you know, that that included like the chief
of staff and the general counsel, too.
Q: So, if there was blame to be laid, it would not be laid at the feet
of the officers of the higher-ups; is that accurate?
A: That was what — that was where they wanted to go.
Q: But it was okay to lay the blame at some of the subordinate
employees -A: Sure.
Q: ~ lay blame at the feet of some of the subordinate employees?
A: Correct.
Q: You fell into that latter category?
A: Yes.
Id at p. 117 (emphasis added).
45
Reiff deposition, p. 47.
13
�individual fund-raiser receiving a contribution, and that the automatic vetting process in place in the
1992 and 1994 election cycles was designed to screen only for "appropriateness."
Sandler tried to explain the difference between screening for legality and appropriateness in
the following manner:
[F]irst of all, with respect to legality, throughout the time period [February 1993 to
October 1996] thefinancestaff and the accounting staff were advised that if there
was any issue or question of legality, that it should be brought to the Office of
General Counsel. The Finance staff was issued specific written guidelines to that
effect and there were also training sessions held for that purpose.
With respect to appropriateness, it is part of legality, there was automatic
screening for donor limits. In other words, If somebody had written an individual
check and it was checked and it was not clear if it was designated for the federal
account, it was checked to see if they had already given the maximum. We routinely
check to see if they had given the maximum to the federal account. If they had, we
automatically put it in a non-Federal account. If they hadn't, the procedures
generally throughout this period called for the appropriate redesignation form to be
sent out to the donor.
So, I mean that is an aspect of legality. Other more complicated questions of
legality, the procedure was to bring them to our office for discussion, which was
done routinely and consistently throughout this period.
With respect to appropriateness, I described the process that was in place until
approximately May of 1994. It is my general understanding that as of when Ms.
Matsuyama left the DNC that the research position, the position of the Research
Division that she had, was either not filled or was used for other research purposes,
and that a Nexis account number was given to the Finance Division, and that the
Finance Division used that Nexis account from time to time, as they found it
necessary, to screen donors who were not otherwise well-known to them or about
whom they had some concern for appropriateness.
46
46
Deposition of Joseph E. Sandler, May 15, 1997, pp. 58-59.
14
�47
This distinction was also urged by Reiff, and Sandler reiterated it in his opening statement before
48
the Committee in public hearings. The exculpatory nature of this distinction is that Reiff and
Sandler can claim that vetting for issues of "legality" was not terminated on their watch.
The attempt to describe the elaborate research of the 1992 "vetting desk" as mere
"appropriateness" vetting is revisionist. Those who created that "vetting desk" were concerned with
issues of legality ~ as well as broader concerns about the appropriateness of accepting certain
contributions. Rob Stein testified that he and former DNC General Counsel Carol Darr looked to
the 1988 Dukakis campaign because they "knew that they had [a] well-structured and [a] rigorous
49
system ... for complying with the laws governing campaign finance." He testified that the system
actually implemented by the DNC for the 1992 elections was one that "worked," adding that "we
had what we needed to assure that the laws were being complied with in terms of donor
contributions. And it wasn't just the laws, we had concerns about conflicts of interest or tainted
50
money or whatever."
The old DNC "vetting desk" supplemented the DNC's training its fund31
raisers to be sensitive to legal issues.
47
See, e.g., Reiff deposition, p. 19 ("There is political and appropriateness
screening, and then there is legal, legality screening.").
48
Testimony of Joseph E. Sandler, September 10, 1997, pp. 4-8. Sandler stated that
there "are two distinct aspects to such screening: legality and appropriateness."
Id. at p. 4. He then gave an explanation of the distinction similar to that offered in
his deposition.
49
Stein deposition, pp. 57-58.
50
Id. at p. 59.
5 1
Id. at pp. 59-60.
15
�Second, the "appropriateness" vetting described by Sandler and Reiff -- Nexis searches and
searches of FEC databases ~ could have triggered a review of contributions for both legality and
appropriateness. After all, an illegal contribution would seem to be inappropriate, and the research
gathered in assessing the "appropriateness" of a contribution could well be used to ascertain its
legality. In fact, Neil Reiff testified as follows:
Q: So hypothetically if you do a Nexis search on someone and it turns out
that person is a citizen of a foreign country and the article goes on to state they don't
have any residence status in the United States, therefore, take itfromthere they can't
make a contribution, you would be able to use that information to make a legality
decision?
. .
A: Hypothetically, yes.
MR. BEST [DNC lawyer]: Or hypothetically be found that he was a
bankrupt.
THE WITNESS: There is [sic] a million things you could find out. It is all
part of the same process.
BY MR. KUPFER [Counsel for the Committee]:
Q: And so it seems that you stated that you can get information that would
go towards legalityfromthe appropriateness screening?
A: Hypothetically you can, but it is not a foolproof system.
Q: I understand it is not a foolproof system. You could get information
that would assist you in making a legality determination, is that correct?
A: Hypothetically speaking, yes.52
52
Reiff deposition, pp. 65-66.
16
�Accordingly, the dismantling of the automatic "appropriateness" vetting system - to use Sandler's
and Reiff s characterization -- removed information from the process that could have been
informative to the potential legality of a contribution."
53
In fact, as discussed earlier, Reiff testified that, before Matsuyama's departure, he
had been reviewing approximately five to 10 Major Donor Screening Forms per
week. Id. at p. 36. Obviously, this afforded Reiff, the DNC's Deputy General
Counsel, an opportunity to apply his legal training to the Nexis and FEC research
gathered by Matsuyama. But, as also discussed earlier, after Matsuyama left, the
responsibility for vetting fell off Reiff s "radar screen." Id. at p. 42.
Despite Reiff s relatively straightforward testimony, Sandler attempted to
assert in his public testimony before the Committee that the failure to re-assign
the so-called "appropriateness" screening did not "materially contribute to the
receipt of the contributions the DNC has been required to return," because "a
routine Nexis check would not detect contributors serving as conduits for ...
foreign source contributions." Sandler testimony, p. 8. Sandler then offered, as
one of several examples, the Yogesh Gandhi contribution, discussed elsewhere in
this report. See the section of this report on Yogesh Gandhi. According to
Sandler, Lexis-Nexis searches ~ had they been performed - would have disclosed
"a small claims court judgment and a routine State tax lien for a few thousand
dollars." Sandler testimony, p. 9. This blithe dismissal of Gandhi's public record
caused Senator Collins to wonder:
First of all, I have to say, I don't think a tax lien of any sort is routine. But
putting aside that question, would it not have struck you as at least
somewhat unusual and worthy of further investigation that an individual
who has never before made a political contribution in any amount, comes
in with a check for $325,000, and yet your own check, your own quick
review, your own Lexis-Nexis review, reveals that he has a small claims
judgment against him for unpaid bills as well as a tax lien? When you
couple a first-time donor making a huge contribution with the existence of
a small claims court judgment and a tax lien, why wouldn't that raise
suspicions for you to want more information and to clear this check and
vet it more thoroughly?
Hearing Transcript, September 10, 1997, p. 82. No satisfactory answer was
forthcoming, although the answer may underscore Sandler's complete lack of
caution. To Sandler, the existence of unpaid small claims judgments and state tax
liens was not something that raised "red flags," or was "unusual." Id. at p. 83.
17
�Even assuming that the revisionist explanation should be accepted, and further assuming that
there was no interdependence between "appropriateness" and "legality" screening, the legality
"screening" envisioned by Sandler, which called on the fund-raisers themselves to vet contributions,
was fatally flawed. The first fatal flaw with this alleged process was that individual fimd-raisers did
not understand that they were to be the only line of defense against illegal contributions. For
example, when the Committee deposed David Mercer, the DNC's Deputy National Finance Director,
he was shown three consecutively-numbered Lippo Bank checks, each dated August 1, 1995, from
54
Kenneth R. Wynn to the DNC, and each for $5,000.
Each check was pre-printed with a home
55
address in Jakarta, Indonesia. Mercer filled out a check tracking form for these contributions. This
provoked some of the following questions:
Q: Is there a procedure in place when receiving a check with a foreign home
address?
A: I do not recall among the literature that we received, among the guidelines,
fund-raising guidelines, that if you receive a check with a home address or I don't
even know if it's a home address, but an address that has a foreign city and State in
it that you were to do X, Y or Z.
Q: Were there any procedures in place if you suspected a check was not from
a U.S. citizen?
A: Yeah. Yes.
Q: What were those procedures?
54
Checks from Kenneth R. Wynn to the DNC, August 1, 1994, and accompanying
DNC Check Tracking Form (Ex. 4).
55
Deposition of David Mercer, May 14, 1997, p. 42. A check-tracking form was a
form usually filled out by the DNC fund-raiser to keep track of contributors,
identify those responsible for soliciting the contribution, and ascribe the
contribution to a particular event (if applicable).
18
�A: To inform the individual that we were unable to accept contributions from
noncitizens.
Q: In this case, you did not, to your recollection, attempt to contact the
individual who made the contribution; is that correct?
A: That is correct.
Q: Why not?
* + +
A: I don't recall contacting somebody to find out where they lived or
whatever else.
To me, I filled out the check tracking form. A lot of what we do, we
receive thousands of checks. I think we received more than a million checks last
yeaj. You'd fill out the tracking form.
If there's over - if there is - if it is drawn on a U.S. bank account, that
would suffice. If somebody had a question about it as it went through the process,
they'd bring it back to me . . . .
56
Later, Mercer continued:
Q: Earlier when we were talking about his check-tracking process and we
were talking specifically about these checks that showed an Indonesian home
address, if I recall, you said you'd put down the information on the check-tracking
form and you'd send it through the system, and if any red flags came up, you'd
expect that they'd bring it back to your attention; is that correct?
A: Yeah, that's correct.
Q: Who in your mind was the person who would raise the red flags relating
to the information on the check-tracking form and the checks?
A: In my mind, it would be anybody that was of a superior to me, or who I
reported to or legal counsel or — you know.
57
56
Id. at pp. 218-19.
57
Deposition of David Mercer, May 27, 1997, p. 14.
19
�In short, although Mercer plainly had received some training and was provided with legal guidelines,
he still thought that someone, presumably in the Office of General Counsel, was reviewing new
contributions as a matter of course. Needless to say, this understanding was incorrect.
In fact. Mercer's immediate supervisor, Sullivan, always understood that a two-step
screening process was supposed to be in place at the DNC: " I was told that there was sort of a twostep process. All checks of $10,000 and above are automatically run through a Lexis-Nexis check
by staffers in the . . . Research Department, and that there was also additional review by the Legal
Department... As you know, Lexis-Nexis was primarily appropriate/inappropriateness, you know,
because it was explained to me Lexis-Nexis doesn't necessarily determine whether a check's legal
58
or illegal, and so then there was then a review as to legality by the Legal Department." This
understanding was essentially consistent with the 1994 vetting process, which involved the
collaboration of Rumi Matsuyama of the Research Division and Neil Reiff from the Office of
59
General Counsel.
As discussed, even this modest system was dismantled. Although Sullivan
knew that he was "to use [his] best judgment in avoiding potential problems," he also believed that
60
"once the check was passed on, this process took place." He was not aware of any change in this
61
process until after the 1996 election. Clearly, top DNC fund-raisers were unaware that they bore
58
Deposition of Richard L. Sullivan, June 5, 1997, pp. 92-93; see also id. at pp. 95,
120-21.
59
See supra, notes 8-14 and accompanying text.
60
Deposition of Richard L. Sullivan, June 5, 1997, p. 93.
6 1
Id. at pp. 97, 124.
20
�primary -- indeed, exclusive - responsibility for raising concerns about potentially illegal
contributions.
The fact that Mercer and Sullivan were unaware that they bore exclusive responsibility for
legal vetting is unsurprising; they were not told about the dismantling of the old research system.
A short passage from Sandler's testimony confirms this:
Q: Let me go back to my prior question and I believe the answer, with all due
respect, is a yes or no answer.
At the time that Ms. Matsuyama left the DNC and was no longer ~ and no
one was any longer doing a NEXIS or an FEC database research, were people within
the Finance Division apprised of the fact that these searches were no longer being
automatically done?
A: Not that I'm aware of.
Q: So, you yourself certainly never apprised them of that; is that accurate?
62
A: That's accurate.
Moreover, even assuming that individual fund-raisers were aware that they were the first and
last line of defense against illegal contributions, charging them with such final responsibility would
itself be reckless and unreasonable. Fund-raisers seek funds. DNC fund-raisers obviously wanted
63
credit for soliciting contributions. The DNC kept track of contributions credited to individual fund64
raisers. Presumably, successful fund-raisers could expect appropriate remuneration or recognition.
Making the fund-raiser responsible for legal vetting of contributions creates a conflict of interest.
Fund-raisers want to raise money, not reject it. And this common-sense proposition could never
62
Deposition of Joseph E. Sandler, August 21, 1997, pp. 95-96.
63
See, e.g.. Deposition of David Mercer, May 27, 1997, p. 53.
64
Id.
21
�have been more true than it was in 1996 for the DNC, given the White House's enormous appetite
for money.
This inherent conflict of interest is the second fatal flaw with the alleged "legality" screening
described by Sandler and Reiff. Mercer's testimony underscores that a fund-raiser is not the best
person to vet contributions for legality:
My responsibility was to work within the parameters of the guidelines that are
outlined and you have copies of, which I submitted via the subpoena. My job was
not to work in compliance and verifV everv single check, its origin, the source of the
monev and everything else. We work in this environment on the good faith and the
understanding ofthe people we work with. If someone within our ~ within the DNC
had responsibility for checking into that, I don't know who it was. I presumed that
whether through legal counsel or others, that those kinds of things would be detected
or that people would question or what have you. I had never been ~ it had never
been brought to my attention about any question of checks prior to the stories
breaking in October. But mv iob was as a fund-raiser to raise the monev and to make
sure that the check-tracking forms were filled out and to submit the check-tracking
forms.
65
Although Sandler would not agree that the alleged system for vetting contributions for
"legality" at the DNC labored under an inherent conflict of interest, he recognized that "in retrospect
66
we've separated the function now." He further acknowledged that "as a matter of good policy and
practice . . . it was appropriate to have those functions . . . in a separate Compliance Division rather
than in the Finance Division."
67
65
Id. at pp. 27-28 (emphasis added).
66
Deposition of Joseph E. Sandler, August 21, 1997, p. 77.
67
Id. at 78.
22
�Conclusion
The Committee concludes, as any reasonable observer must, that the DNC's system for
vetting contributions during the 1996 election was wholly inadequate. Most DNC officials agree
with this much of the Committee's conclusion. For example, Joe Sandler explained what the DNC
perceived as deficiencies in its 1996 system: "[T]here was not automatic screening of contributions
for appropriateness and legality of every donor not well-known to the DNC above a certain dollar
threshold. It was instead a perceived deficiency . . . that it had instead been left to the judgment of
individual members of the finance and/or accounting staffs to identify problems of that nature and
68
bring them to the Office of General Counsel."
68
Deposition of Joseph E. Sandler, May 15, 1997, pp. 65-66. Sandler was even
more explicit about the vetting deficiencies in his comments to the press. The
following paragraphs from a July 1997 article, which focused on Sandler, are
interesting:
What happened, Sandler says, is that "the person who was doing
the research work wasn't replaced." That key job involved ensuring that
contributions were not coming from inappropriate sources like ex-cons,
foreign nationals, or people with insufficient resources.
Instead, says Sandler, the screening process came to depend on
members of thefinancestaff bringing questions and problems to Sandler's
office. "That clearly was a mistake, and the automatic background checks
should have been continued," he says.
When asked whether anyone warned in some formal way that
fund-raisers should look more critically at the money they were raising,
Sandler demurs. "This is an area I probably should not comment on in
detail because it's of interest to the investigators," he says.
Timothy J. Burger, "The DNC's Fall Guy?" Legal Times, July 14, 1997, p. 16.
As discussed earlier, the fund-raisers were not told that they were the last line of
defense. The article also quotes an anonymous "knowledgeable Democratic
operative" as saying, " I blame this whole thing on Joe." Id. at p. 15.
23
�DNC National Finance Director Richard Sullivan concurred, adding additional context:
[T]here was not an adequate legal or compliance system set up to back up in an
historic elfort in terms of the aggressiveness of the fund-raising, and throw into there
the fact that... we throw John Huang into an aggressive fund-raising operation with
no -- with a poor compliance system and no legal vetting. This is what happened.
69
Undoubtedly, the DNC should have been more vigilant and preserved its vetting procedures ~
70
especially in the face of such historic, aggressive fund-raising.
69
Deposition of Richard Sullivan, June 25, 1997, pp. 120.
70
Furthermore, the DNC's non-existent vetting procedures were unique; Democrats
cannot protest that "everybody does it." When Senator Glenn questioned Richard
SuHivan, the following colloquy took place:
Senator Glenn: Well, I guess what I am getting at is this: I
wondered if you had knowledge of what kind of a system they
[Republicans] had set up. Was the system on the Democratic side very
similar to theirs? Was ours more extensive than theirs? Was theirs more
extensive than the one [on] the Democratic side? Do you have any
opinion on that?
Mr. Sullivan: As to what kind of system, Senator?
Senator Glenn: As to vetting these things, making sure that
campaign contributions were legal, deciding which ones should be
returned, deciding whether we are going to go after foreign money or not.
... was the system that they had set up similar to the one that you have
been describing a little bit here?
Mr. Sullivan: Unfortunately, Senator, I'm sorry to tell you, but
their system was much more systematic, complex, and thorough than our
system.
* **
Mr. Sullivan: In your question of comparing the legal vetting of
the two committees, it's my understanding that the Republican National
Committee's was much more thorough. I don't know that for a fact,
obviously, but that's just my sense.
Senator Glenn: Okay. In that opinion, what would back that up,
what observation? Do they have different layers of people that vetted
these things? Do they have different lawyers, different legal staffs? How
24
�The DNC now has a new compliance system, one very similar to the "vetting desk" in place
during the 1992 election cycle. This may go a long way toward diminishing the risk of future fundraising scandals ~ provided the DNC keeps its system in place. As for the 1996 federal elections,
however, the new system came too late. As DNC Chairman Don Fowler testified, the new system
"was the equivalent of closing the door [of] the bam after the horse left . . . ."
71
The interesting question is how the bam door was opened in the first place. Although it may
be convenient to blame the DNC's Office of General Counsel for simple negligence, as Sullivan
72
explicitly did, the conduct appears worse than negligent, and the responsibility vests at a level
above the general counsel. After all, the members of the Office of General Counsel were concerned
about the dismantling of the vetting system, and Reiff had "the impression" that Sandler had raised
73
these concerns with higher-ups. It is no coincidence that vetting was dismantled during a period
of historic need for money to pay for unprecedented advertising, resulting in huge amounts of
foreign and other illegal money. In fact, it appears that the DNC made a decision to operate under
a "system" that would tum a blind eye towards questionable contributions, allowing the DNC to
receive large, illegal contributions without any accountability for their receipt in the event that they
would their system be differentfromthe one that the Democratic National
Committee used?
Mr. Sullivan: I think you described it. I think they had a much - 1
think they had a much more thorough ~ I think a much more thorough
system of vetting of a committee of lawyers, as I understand it.
Testimony of Richard Sullivan, July 9, 1997, pp. 36-37, 40.
71
Fowler deposition, p. 351.
72
Deposition of Richard Sullivan, June 25, 1997, pp. 119-20.
73
See supra, note 39.
25
�74
were detected. In the absence of any sanctions deterring such behavior, the DNC, run by the White
75
House, consciously disregarded the prospect of illegal contributions.
74
See the section of this report on the FECA for a discussion of the sanctions that
should be available to the FEC to deter such activity in the future.
75
See the section of this report on the White House's control of the DNC.
26
�DNC FUNDRAISING IN THE WHITE HOUSE:
COFFEES, OVERNIGHTS AND OTHER EVENTS
Overview
The story of the Clinton Administration's use of the White House as a DNC fundraising tool
had its origins in the panic that set in after the Republican party took control of the House of
Representatives and the Senate in the November 1994 elections. At the DNC, the general mood was
nearly apocalyptic. As Terence McAuliffe recalled,
the President was in serious trouble. A lot of people wondered if the
President was even going to run again. I can tell you the political
mood at the time clearly was that he had no chance of winning again,
clearly would not win re-election and would have a very tough time
with a primary. And there was a lot of talk that people would run
against him in a primary. It was a very tough political time.
1
Democrats realized that if the President were to be reelected, it would take an extraordinary amount
of money, more than had ever before been raised in a presidential campaign. In an article
subsequently published in Newsweek, George Stephanopoulos — who was at the time Senior Advisor
to President Clinton — described the bleak atmosphere in the White House in late 1994, recounting
that this extraordinary challenge was felt to require extraordinary responses. It was believed, he
wrote, that reelecting Bill Clinton and Al Gore would
take cash, tons of it, and everybody from the President on down knew
it. So money became a near obsession at the highest levels. We pulled
out all the stops: overnights at the White House, coffees, intimate
dinners at Washington hotels, you name it."
2
Deposition of Terence R. McAuliffe, June 6, 1997, pp. 11-12. For further discussion of this issue,
see the sections of this report on the White House's thirst for money and its control of the DNC.
George Stephanopoulos, "The View From Inside," Newweek, March 10, 1997, p. 27.
�All of these DNC events — coffees, overnights, dinners, and so forth — would be aimed at raising
money.
One of the prime architects of this campaign to "pull out all the stops" was Terry McAuliffe,
who met with the President on December 27, 1994, to discuss in general terms what needed to be
done to prepare the Democratic Party for the 1996 election and the prevailing mood of the donors
3
upon whose contributions the party's efforts were to focus. Among other things, McAuliffe assured
the President that he himself would organize the necessary fundraising and generally put "the
4
operation together."
It became clear, even during this discussion, that the President's own
commitment of time and energy to encouraging campaign contributors would be central to the party's
5
fundraising effort. At the end of their meeting, the President asked McAuliffe what he needed to do,
to which McAuliffe responded that he neeeded "some time with you [the President] to meet with
some of the key supporters who are demoralized out there so that you can get them re-energized and
6
ready for the '96 election."
A few days after meeting with the President, McAuliffe sent a follow-up memorandum to
Nancy Hernreich, Director of Oval Office Operations, reiterating the "projects" he had discussed with
Deposition of Terrence R. McAuliffe, June 6, 1997, pp. 12-14.
Id at p. 14. McAuliffe told the President that "you have broad support out there in the donor
community, which is what I represented as the Finance Chair of the party. I'm going to be able to
put this operation together for you. The support of the people will be there for you. Don't worry
about it. I'll handle it." Id.
Id. at p. 16.
Id.
�7
the President. The first project was to organize breakfasts, luncheons, and coffees with the President
for about twenty "major supporters" at a time — to "offer these people an opportunity to discuss
issues and exchange ideas with the President."* McAuliffe's second project was to offer the very top
9
supporters "overnights" at the White House. The third project in McAuliffe's memorandum was
to include "key supporters" in various other activities with the President, including "golf games,
10
moming jogs, etc."
The key to all three of these projects was to give major donors "quality time
for the President.""
12
Hernreich forwarded this memorandum to President Clinton, asking him whether she should
pursue McAuliffe'sfirstproject with Billy Webster, Deputy Assistant to the President and Director
of Scheduling and Advance, whether she should try to arrange overnights through the First Lady and
Terry McAuliffe, memorandum to Nancy Hernreich, Jan. 5, 1995 (Ex. 1). This memorandum is
dated January 5, 1993, but McAuliffe recalls sending it to Hernreich shortly after his meeting with
the President in late December 1994. Deposition of Terrence R. McAuliffe, June 6, 1997,
pp. 113-14.
Ex. 1.
Id. His memorandum does not say this explicitly, merely providing a list of the DNC's ten top
supporters. Nancy Hernreich, however, apparently clearly understood the idea, because she added
a handwritten note reading "overnights" to this part of McAuliffe's memorandum. Hernreich
confirmed that she wrote "overnights" on the document, but could not recall whether this had been
her idea or that of the President. Nancy Hernreich deposition, June 20, 1997, p. 126. Other senior
officials also understood that McAuliffe's second project involved offering overnight visits at the
White House to key supporters. A memorandum from Janice Enright to Harold Ickes enclosing a
copy of McAuliffe's memorandum, to example, lists one of McAuliffe's three projects as
"overnights for top top [sic] supporten." Janice Enright, memorandum to Harold Ickes, Jan. 6,
1995 (Ex. 2) (discussing McAuliffe's request to the President).
10
Ex. 1.
Deposition of Terrence R. McAuliffe, June 6, 1997, p. 114.
12
See Ex. I (handwritten note in upperright-handcomer).
�13
Carolyn Huber, and whether she should "handle" (i.e., include) top supporters in other activities.
Hernreich also asked whether she should obtain approval for these three projects from Harold Ickes,
14
Deputy Chief of Staff to the President.
Meanwhile, according to McAuliffe, the White House
obtained approval from its lawyers for the scheme: Hemreich's office
scheduled the White House, whoever does what they do over there,
legal counsel, whatever, you know, decided that we could do [events
for donors] in the Map Room in the White House, and I was given two
or three dates to bring our past supporters in to see him [the
President].
15
Officials apparently believed that there was nothing wrong with using the White House to cultivate
16
campaign contributors "for the upcoming campaign."
As Vice President Gore himself apparently observed during a "political budget meeting" with
President Clinton, the DNC could raise the amount of money it needed "ONLY IF — the President
17
and I actually do the events, the calls, the coffees, etc."
For his part, the President responded to
McAuliffe's ideas with great enthusiasm, responding to Hemreich's note with one of his own: "yes,
Id
14
Id
Deposition of Terrence R. McAuliffe, June 6, 1997, pp. 113-114.
16
Id at p. 113. For top Democratic decision-makers, the end apparently justified the means: after all,
"it was a very tough time for us." Id at p. 114.
17
Albert Gore, "Points for Political Budget Meeting with President," undated, p. 4 (Ex. 3); see also
generally Testimony of Jerry Campane, Sept. 18, 1997, pp. 180-181. (The Vice Presidential notes
were produced to the Committee in typewritten form with document production "BATES" numbers
following consecutively from a memorandum to the President from Ron Klain. It is clear from
theirfirst-personvoice and distinct typeface that the Vice Presidential notes are a different
document.)
�18
pursue all 3 [projects] and promptly — and get other names at 100,000 or more; 50,000 or more."
The President wrote that he was "[r]eady to start overnights right away — give me the top 10 list
19
back along with the 100, 50 folks." With this note. President Clinton set into motion the use ofthe
White House to host fundraising events for the DNC.
20
White House Coffees
Documents released by the White House revealed that between January 11,1995 and August
21
23, 1996, White House officials hosted 103 coffees. Most of these events were held in the Map
Room or the Roosevelt Room at the White House itself.
22
Some coffees were held in the Old
Executive Office Building ("OEOB") and others — some of the coffees hosted by the Vice President
— were held at the Naval Observatory.
The White House divided these coffees into three categories:
Category
Number of Coffees
Number of Guests
DNC Supporters
60
633
Clinton/Gore '96 Supporters
11
110
18
Ex. 1. The President copied this message to Harold Ickes, Leon Panetta and Billy Webster, the
Director of Scheduling.
19
Id.
20
See generally, e.g., Testimony of Jerry Campane, Sept. 18, 1997, p. 176 (recounting reasons for his
conclusion that coffees were fundraising events). As even Harold Ickes acknowledged, "there was
no question that these coffees were in part to facilitate fund-raising." Testimony of Harold Ickes,
Oct. 8, 1997, p. 155.
21
Chart of White House Political Coffees, January 11, 1995-November 5, 1996 (Ex. 4).
22
Id. The Roosevelt Room is directly opposite the Oval Office. In fact, as described herein, at least
one of the coffees ostensibly held in the Roosevelt Room actually occurred in the Oval Office itself.
�Category
Number of Coffees
Number of Guests
Political and Community Leaders
32
498
TOTAL:
103
1,241
23
Because some persons attended more than one DNC-sponsored coffee, the 633 people listed as having
attended the 60 DNC-sponsored coffees actually numbered only 532. Checking these names against
lists of campaign contributors available from the FEC reveals that 92 percent (488 out of 532) of the
individuals who attended DNC-sponsored coffees at the White House contributed to the Democratic
Party in 1995 or 1996. Their contributions to the DNC during the 1996 election cycle — given
personally or through their businesses — in fact, totaled $26.4 million, an average contribution of
24
approximately $50,000. Moreover, many of these contributions were closely linked to the donor's
coffee attendance: almost one-third ofthe total, some $7.7 million, was given to the DNC within one
25
month of a donor's attendance at a White House coffee. Indeed, in keeping with the DNC's plan
26
to cultivate "top top" contributors, at least 12 individuals contributed at least $100,000 on or around
the dates of the coffees they attended: Miguell Lausell, David Bonderman, Robert Rubin, Derald
23
This number does not include White House or DNC employees who attended the coffees.
24
Testimony of Jerry Campane, Sept. 18,1997, pp. 185-86.
2 5
See generally Testimony of Jerry Campane, Sept. 18, 1997, p. 185.
2 6
•
Ex. 2.
6
�Ruttenberg, Richard Lawrence, Paul Cejas, Peter Mathias, Robert Menschel, Samuel Rothberg, Barrie
27
Wigmore, Lewis Manilow, Pauline Kanchanalak, and Melvyn Weiss.
As compared to other fund-raising tools, coffees were a highly effective way for the DNC to
raise money. The DNC's direct mail solicitations during this period were customarily burdened by
28
overhead costs of 42 percent, with the effect that only 58 cents out of each dollar solicited actually
found its way into party coffers. By contrast, however, White House coffees required only minimal
DNC expenditures, ensuring that almost all of the funds solicited in connection with such coffees
could be pumped into campaigning against the Republicans. A memorandum Harold Ickes wrote to
the President and Vice President, for example, did not even bother to list the DNC's expenses for
29
White House coffees, describing such expenses as "not applicable." Every cent of every dollar
30
raised by the DNC through the White House coffees, therefore, was treated as income.
A number of White House and DNC documents underline the importance of the coffees as
fundraising events. An e-mail message sent by Jennifer O'Connor, Special Assistant to the President,
to Karen Hancox at the White House's Office of Political Affairs, for example, made clear that White
27
Testimony of Jerry Campane, Sept. 18, 1997, p. 190; see also Chart of individual contributors of
$100,000 or more to the DNC within one month of attending a coffee (Ex. 5).
28
Testimony of Jerry Campane, Sept. 18, 1997, pp. 186-87.
29
Harold Ickes, memorandum to the President and Vice President, Feb. 9, 1996 (attachment to Todd
Stem & Phil Caplan, Memorandum for the President, Feb. 16 ,1996), p. 6 (Ex. 6) (discussing DNC
major donor fund-raising events and requests); Testimony of Jerry Campane, Sept. 18, 1997,
p. 187. There must have been some minimal expenses associated with the coffees for the cost of
the coffee and pastries served. See John O. Sutton, memorandum to Tracy B. LaBrecque, Jan. 23,
1995 (Ex. 7) (noting that "[p]er Harold [Ickes], the DNC will pay for the coffees"). It is equally
clear, however, that the party regarded these costs as negligible.
30
Testimony of Jerry Campane, Sept. 18, 1997, p. 187.
�House officials considered the coffees "money tool[s]" from which party funds could be raised even
31
if no formal admission fee were charged.
Ironically, White House officials believed that not
explicitly charging an admission fee was the way "they could make the most money" from the
32
coffees.
The bottom line, however, was simple: according to DNC Finance Director Richard
Sullivan, for guests invited to DNC-sponsored White House coffees, "[w]e want[ed] potential
33
donors."
Although White House and DNC officials later resisted using the term "fundraiser" to
characterize the coffees through which they had tried to raise political contributions in the White
34
House, Ickes described them at the time — and in messages sent to and read by the President — as
33
"political/fundraising coffees." MemorandafromIckes to both the President and the Vice President
also detailed the amounts raised by the White House coffees, comparing these sums to contributions
31
Jennifer O'Connor, e-mail to Karen Hancox, May 10, 1995 (Ex. 8) (discussing event in New York
and describing it as being "[l]ike the President's coffees"); see also Testimony of Jerry Campane,
Sept. 18, 1997, p. 180.
32
Ex. 8.
33
Deposition of Richard L. Sullivan, June 4, 1997, p. 128.
34
See. e.g., Ickes testimony, pp. 154-55.
35
Harold Ickes, Memorandum to the President, May 14, 1996 (Ex. 9) (using term three times). There
is no question that the President actually read this document. The stamp at the top of the document
indicates that the President saw it on May 15, 1996, and the President's name on the first page is
checked with his unusual left-handed check mark. The President also made a notation on this
memorandum stating that he wished to discuss it "once more" with Harold Ickes. Id
It is also apparent that many of the contributors involved with White House coffees
understood their intent. The "memo" portion of a check collected from Ernest Green on the
moming before a White House coffee attended by his sometime business partner Charlie Trie and
their would-be client Wang Jun, for example, was annotated "Fundraiser." Phyllis Green & Emest
Green check #5072 for $50,000 to the DNC on February 6, 1996 (Ex. 10) (with accompanying
DNC Finance Executive Summary indicating collection of $50,000 in connection with "POTUS
COFFEE 2/6/96").
8
�36
obtained through other DNC fundraising events.
In the first half of 1995, for example, the coffees
37
raised $1 million for the DNC. Indeed, Ickes tracked the progress of the DNC's coffee fundraising
on a coffee-by-coffee basis. Thus, for example, did his bi-weekly reports to the President and the
38
Vice President list three Presidential coffees in December 1995 that raised $400,000 each, and a
39
coffee in January 1996 that raised $500,000. For two coffees in June 1995 that between them raised
$1 million, moreover, Karen Hancox, Deputy Assistant to the President for Political Affairs, wrote
40
to inform Ickes ofthe coffee attendees (with POTUS) + amts. raised." Lest there be any doubt on
this point, a 1995 list of "DNC Fundraising Events" contained an entry for "Coffees" — noting that
41
during the period in question they had already raised $1,000,000.
DNC briefing materials prepared for the President underscore the obvious fact that certain
White House coffees were designed to be fundraising events and functioned as such. A DNC briefing
paper entitled "Democratic National Committee Budget/Fundraising Presentation to the President on
6 June 1996," for example, contains, among other things, detailed information tracking various
36
Harold Ickes, Memorandum to the President and Vice President, June 28, 1995 (Ex. 11).
37
Id. This memorandum has also been stamped that the President saw the document, it is marked
with the President's left-handed check mark and contains a notation from the President to Ickes.
38
Harold Ickes, Memorandum to the President and Vice President, Jan. 2, 1996, p. 4 (Ex. 12)
(discussing bi-weekly DNC report dated December 22, 1995).
39
Harold Ickes, Memorandum to the President and Vice President, Jan. 29, 1996, p. 11 (Ex. 13)
(discussing bi-weekly DNC report dated January 19, 1996).
40
Handwritten note and list of attendees from coffees on June 7 and June 21, 1995 (Ex. 14). The
coffee on June 7 raised $400,000, while the one on June 21 raised $600,000. Id
41
List of DNC fund-raising events dated June 25, 1995 (Ex. 15).
9
�Presidential fundraising events, including White House coffees. Entries for individual events feature
notations indicating:
(a)
the total projected amount to be raised;
(b)
how much of that amount had been collected as of the time of the
report's compilation;
(c)
the status of the DNC's cash flow into federal ("hard money") and
non-federal ("soft money") accounts;
(d)
the proposed fund-raising schedule for the President and Vice
President; and
(e)
estimates of the DNC's ability to meet its fund-raising goals.
42
Also attached to the June 6 Presidential Briefing are monthly schedules containing information
concerning specific events, including projected fundraising totals — i.e., projected federal
contributions, corporate contributions, non-federal individual contributions. Also appearing in these
materials are lists of contributions "in hand," totals of federal contributions received, and both the
43
projected and the actual costs of particular events.
The June 6 Presidential Briefing schedules contain entries for 22 fundraising coffees and nine
"servicing" coffees. Each of these fundraising coffees had projected revenues of $400,000, while the
44
"servicing" coffees had no projected revenue.
As indicated by thesefigures,the DNC drew a
distinction between fundraising coffees (from which contributions were anticipated) and coffees at
42
See June 6 Presidential Briefing (Ex. 16).
43
Id
44
Id.
10
�which no money would be raised. For those coffees designed to raise money for the DNC, the figures
provided in the briefing were so specific that they identified the portion of each fundraising coffee's
projected revenue that would be apportioned to federal dollars (i.e., "hard money" that would be
available to Clinton/Gore '96 rather than simply to the DNC).
45
In portions dealing with events that had already occurred, moreover, the June 6 Presidential
Briefing and other DNC memoranda also summarize contributions the DNC had received as a result
of other White House coffees. A May 17, 1996 White House coffee, for example, had a projected
46
revenue of $400,000 — of which $300,000 was described as already being "in hand."
In a separate
DNC memorandum listing 1996 fundraising events, a White House coffee on February 22, 1996 was
described as having had a projected revenue of $400,000, with $340,000 "raised to date" — while
seven other Presidential coffees ("POTUS coffees") were listed as having each raised all of their
47
projected revenue totals of $400,000.
These documents make quite clear that while not all coffees were fundraisers, many coffees
were designed specifically for that purpose. Such unequivocal accounts of "projected revenue" and
the specific bank accounts into which money was to flow, for example, make irrelevant DNC and
White House officials' reluctance today to employ particular terms or phrases. Despite these intemal
documents' clear focus upon coffee fundraising, DNC officials nonetheless went to some lengths to
preserve the public fiction that the coffees were not fundraisers. Video footage shot by the White
45
Id
4 6
Id. at p. 27
4 7
See DNC 1996 events memorandum (Ex. 17).
11
�House Communications Agency (WHCA) of a December 13, 1995 coffee at the White House, for
example, captured a DNC donor offering Donald Fowlerfivecontribution checks. Fowler refused
to accept this money on the spot, but told the donor that "[a]s soon as this thing is over, I'll call you
48
. . . . We'll get it done." Donors would have to give him their checks for the coffee outside the
White House, in other words, in order to permit the Democratic Party to continue to pretend that the
coffees were not "fundraisers." This pretense, however, cannot survive the revelation of DNC
intemal documents detailing the party's organization and tracking of White House coffees under that
very name and for that very purpose. Whatever their organizers might prefer to call them, many
White House coffees were obviously "fundraisers" in the most elementary sense of the word.
Overnights
As with the coffees, the opportunity to spend a night at the White House was an important
49
means by which the DNC raised fundsfrommajor contributors. White House records indicate that
between 1993 and 1996, at least 938 individuals were overnight guests at the White House.
White House officials divided these guests into the following seven categories:
Category
Number of Guests
Arkansas Friends
370
Longtime Friends
155
Friends and Supporters
111
Public OfTicials and Dignitaries
128
48
White House Communications Agency videotape, Dec. 13, 1995 (footage of White House coffee).
49
Testimony of Jerry Campane, Sept. 18, 1997, p. 190.
12
�Category
Number of Guests
Arts & Letters
67
Family
35
Chelsea's Friends
72
TOTAL:
938
Some 760 of these guests fell into the categories of "family," "Arkansasfriends,""longtime
friends," Chelsea Clinton'sfriends,and "public officials and dignitaries," making them seem unlikely
50
targets for the DNC's "overnights" project. The remaining 178 individuals — from 114 different
families — contributed a total of more than $5 million to the DNC, either personally or through their
51
businesses, during the 1996 election cycle. This amounts to an average contribution per family of
over $44,000."
Because the White House refused to provide a complete accounting of the dates of each
guest's stay at the Executive Mansion, it has not been possible to analyze the nexus between overnight
53
attendance and the date of individual contributions. The limited data the White House has seen fit
to make available to the Committee, however, is highly suggestive: of 51 "long timefriends"listed
50
This is not to suggest, however, that none of these 760 persons made contributions to the DNC. In
fact, a number did. See Testimony of Jerry Campane, Sept. 18, 1997, pp. 190-91.
51
Id at p. 191.
52
Id
53
The Committee asked for this information in mid-August 1997. The White House agreed in late
November 1997 to produce only the names and dates of individuals who contributed at least $5,000
to the DNC during the 1996 election cycle. As of the time of writing, the White House still has not
produced this information.
13
�54
in one document as having attended a White House overnight, fully 49 — that is, some 96 percent
55
— contributed a total of $4,077,459 to the DNC during the 1996 election cycle. The only two
individuals on this list who did not personally contribute were Terry McAuliffe himself and one other
individual, a relative of John E. Connelly, whose company contributed $220,000 to the DNC in
56
1996. FEC records also show that 47 percent of these 51 guests contributed, personally or through
their businesses, a total of $882,840.00 to the DNC within one month of their stay at the White
57
House. Moreover, if these 51 individuals are separated into their 38 different families, FEC records
reveal that 97 percent of these families contributed to the DNC during the 1996 election cycle — for
an average contribution of over $107,000 per family — with more than half of them giving a total of
58
nearly $900,000 within one month of their stay at the White House.
The existence of this list of 51 overnight guests makes clear that although not everyone who
stayed at the White House did so because they had made a donation to the Democratic Party, White
House and DNC officials kept separate records of overnight attendees from whom they had or
intended to solicit campaign contributions. A certain proportion of the overnight stays, therefore,
were obviously intended to be — and functioned as — DNC fundraisers.
54
As noted, these persons came from the White House's list of "longtime friends." Their
contributions, therefore, are not included in the total given for the 178 individuals discussed above.
See Testimony of Jerry Campane, Sept. 18, 1997, p. 192; List of some overnight guests with their
dates of stay, released by the White House (Ex. 18).
55
Id. ; see also Chart of White House overnights as fund-raising tools (Ex. 19).
56
Testimony of Jerry Campane, Sept. 18, 1997, p. 193.
57
Id. ; see also Ex. 19.
58
Testimony of Jerry Campane, Sept. 18, 1997, pp. 193-94.
14
�Other Events
In addition to the coffees and overnights undertaken by DNC and White House officials with
39
the explicit approval of the President, the DNC and White House organized a number of other
activities in order to reach the DNC's fundraising goals. In a memorandum written in May 1994, in
fact, DNC Deputy Chief of Staff Martha Phipps listed no fewer than 19 different activities that she
60
said the DNC wished to coordinate with the White House in order to meet its fundraising targets.
These activities included a remarkable range of benefits or services that could be offered to campaign
contributors:
seats on Air Force One and Air Force Two;
permission to play on White House tennis courts;
seats at private White House dinners;
admission to Rose Garden ceremonies and official White House visits;
invitations to join official delegations traveling abroad;
appointments to boards and commissions;
meal privileges at the White House Mess;
visits to and overnight stays in the White House residence;
"guaranteed" tickets to events at the Kennedy Center;
seats at the President's weekly radio addresses
photo opportunities with the President, Vice President, First Lady and
Mrs. Gore;
seats at the Presidential lunches with corporate CEOs;
"phone time from the Vice President;"
seats at White House screenings of popular films;
monthly lunches with the First Lady or with White House officials
such as Mack McLarty or Ira Magaziner;
use ofthe President's box at two local theaters; and
59
See Ex. 1 (with accompanying note by President Clinton urging officials to "pursue all 3 [projects]
and promptly").
60
Martha Phipps, Memorandum to Ann Cahill, May 5, 1994 (Ex. 20) (discussing White House
activities).
15
�•
61
meetings with Vice President Gore.
According to Ari Swiller, director of the DNC's Trustee Program, at least some of these activities
were indeed offered to contributors by the DNC, including the provision of tickets to the Kennedy
62
Center and visits to the White House residence and overnight stays.
Two particular White House coffees stand out as illustrations of this aspect of the DNC's
fundraising scheme: the events organized on May 1 and June 18, 1996. These two coffees will be
examined in more detail in the following pages.
The May 1,1996 Coffee
On May 1,1996, five men attended a DNC coffee in the Oval Office with President Clinton.
Each of these five — Barrie Wigmore, Lewis Manilow, Peter Mathias, Robert Menschel, and Samuel
Rothberg — agreed to give $100,000 to the DNC just before the White House coffee. Their checks
63
were collected just after they visited the White House, and the DNC recorded their $100,000
61
Id
62
Deposition of Jacob Aryeh Swiller, May 6, 1997, p. 55-56. Swiller also referred to a similar list of
activities recounted in another list compiled in 1994. See also Memorandum to Martha Phipps,
April 25, 1994 (Ex. 21). He also recalled that the DNC had received an allotment of tickets for
White House tours and routinely submitted names to the White House for overnight stays. Swiller
deposition, p. 63.
63
Memorandum of Interview of Barrie Wigmore, Oct. 28, 1997, p. 5.
16
�64
contributions one week after the coffee occurred.
This May 1 event is the first instance documented
in which the President used the Oval Office for one of the DNC's "money coffees."
According to participants in this coffee interviewed by the Committee, these DNC donations
originated with the decision — apparently in early or mid-April 1996 — of Barrie Wigmore, an
investment banker with Goldman, Sachs in New York City, to contribute $100,000 to the Democratic
Party. A longtime supporter of President Clinton, Wigmore said he had made this decision because
he had been upset by the Republican primary campaigns of 1995 and 1996. He claimed that he had
picked the $100,000figurebecause it was a satisfyingly large and "round" sum. Wigmore said this
figure had no further significance, and that no one had suggested that he make a donation of that
65
size.
Having himself made this decision to donate, Wigmore recalled, he told his friend Robert
Menschel — also at Goldman, Sachs — about his idea, and asked whether Menschel might be
64
See, e.g., FECInfo database printout of individual contributor data for Peter Mathias (Ex. 22)
(indicating $100,000 contribution to DNC on May 8, 1996); FECInfo database printout of
individual contributor data for Samuel Rothberg (Ex. 23) (same); FECInfo database printout of
individual contributor data for Barrie Wigmore (Ex. 24) (same); FECInfo database printout of
individual contributor data for Robert Menschel (Ex. 25) (same).
Manilow does not appear in DNC records as a donor, but he told the Committee that he
made $100,000 in contributions, which were paid in installments charged to his credit card in order
to help him accumulate "frequent flier" mileage. Memorandum of Interview of Lewis Manilow,
Oct. 16, 1997, pp. 2-3 (recounting paying via credit card); Wigmore interview, p. 5 (recounting
Manilow's receipt of "frequent flier" miles for credit card donation). FEC records show Manilow
as having made $24,000 in contributions to various Democratic causes after the date of the coffee;
the remaining $76,000 of his commitment to Wigmore may have ended up in the coffers of state
Democratic parties. Cf. FECInfo database printout of individual contributor data for Lewis
Manilow (Ex. 26) (showing contributions during 1995-96 election cycle). All in all, Manilow had
contributed $145,000 to Democrats in the last three election cycles. See Testimony of Jerry
Campane, Sept. 18, 1997, pp. 187-88.
65
Wigmore interview, p. 1.
17
�interested in making a similar commitment. After thinking about this proposal overnight, Menschel
6
6
agreed that he, too, would give SIOO^OO.
Menschel had not previously been a major political
67
contributor: his largest past contribution was no more than "a couple thousand." Over the next few
68
days, Wigmore persuaded the other three men to commit to identical $100,000 contributions. After
69
the group had attended the Oval Office coffee, Wigmore collected their checks — some of which
70
had been written beforehand — and passed them along to the DNC.
71
It is clear that the prospect of a White House visit played some role in inducing the members
of this group to commit to a total of $500,000 in contributions to the DNC. Although one participant,
Menschel, claimed that he would have made his $100,000 donation whether or not he had been
72
invited to the White House, the prospect of a visit does seem to have affected the nature and timing
of at least one of his colleagues' pledges. According to Lewis Manilow, Wigmore told him that if
Manilow were going to make a large contribution anyway, "a nice way to do it" would be to do so
66
Wigmore interview, p. 1; Memorandum of Interview of Robert Menschel, Oct. 17, 1997, pp. 1-2.
67
Menschel interview, p. 1. Indeed, gifts of this size appear to have been unprecedented for most of
these men. See, e.g., FECInfo database printouts of individual contributor data in 1993-94 for
Robert Menschel, Lewis Manilow, Barrie Wigmore, Peter Mathias, & Samuel Rothberg (Ex. 27).
Manilow told the Committee, however, that he had given $100,000 during the 1987-88 election
cycle. Manilow interview, p. 3.
68
Wigmore interview, p. 2.
69
As noted above, however, Lewis Manilow made his donations by means of a credit card. See supra
note 64.
70
See, e.g., infra note 75.
71
See, e.g., Wigmore interview, p. 5.
72
Menschel interview, p. 2.
18
�73
as part of Wigmore's group, so that he could visit the President.
Having been thus told, in effect,
that his donation would buy him a Presidential audience, Manilow agreed. Making clear that he
understood this connection, Manilow later compared the May 1 visit to his attendance at a previous
"event like a coffee" by noting that for the earlier trip, "[tjhere was not money at that point, that was
74
not a money coffee." (It is also instructive that while some of the checks were written before the
75
coffee, Wigmore himself, the principal organizer of this delegation, refrained from writing his own
$ 100,000 check — andfromcollecting those written by his colleagues — until the day after the White
76
House visit had actually occurred. )
The members of Wigmore's group seem to have very much desired a Presidential visit, and
to have expected that, after agreeing to make such significant contributions, they should be able to
meet personally with President Clinton to convey their messages of support. In discussing the
contribution plan with Manilow, Wigmore recalled, the two men decided that they did indeed want
to meet with President Clinton in order to "tell the President how [they] feel, [and] what an important
job he's doing." Accordingly, after securing these donation commitmentsfromhisfriends,Wigmore
promptly called his oldfriendThomas F. ("Mack") McLarty at the White House in order to "see if
we can do this." McLarty, in tum, put Wigmore in contact with Ann Braziel at the DNC. According
73
Manilow interview, p. 1. As to the existence of a causal connection between donation and
invitation, Manilow said only that "you can draw your [own] conclusions." Id.
74
Id. at p. 3.
75
See. e.g., Robert Menschel check #1296 for $100,000 to DNC on April 22, 1996 (Ex. 28).
76
See Barrie Wigmore check #4250 for $100,000 to DNC on May 2, 1996 (Ex. 29); Wigmore
interview, p. 5 (recounting collecting checks from other participants after coffee).
19
�to Wigmore, he told Braziel that he and his friends supported the President and would like to meet
him. "We all feel the same way," he recalls telling her, "and [we] would like to tell the President"
in person. Braziel told him that "we'll see what we can do."
77
The evidence suggests that but for their contribution commitments, the Wigmore group would
not have been invited to the White House on May 1,1996. In Wigmore's conversation with Braziel,
he told her that his colleagues would be giving money to the DNC. Soon after their conversation,
Braziel called Wigmore back to suggest a date on which his group could visit the White House. After
78
a series of discussions, they settled upon May 1 as the date for the event.
Although Wigmore claimed not to recall whether he told Braziel the specific size of their
79
donations, he apparently did so. The DNC, the White House staff, and President Clinton himself
— as they planned the Wigmore coffee — were all soon well aware that these five men had each
80
agreed to become $100,000 donors. This appears to have been precisely what was needed: while
many Americans may have wished to tell President Clinton their views, few had $100,000 each to
offer the DNC for this privilege.
77
Wigmore interview, p. 2.
78
Id at p. 2.
79
Id
On a document written by Sullivan on April 29, 1996 and personally reviewed by President Clinton
on the day of the coffee, for example, White House aide Phil Caplan wrote: "MR PRESIDENT:
Per Doug [Sosnik], the five attendees of this coffee are $100,000 contributors to the DNC." Richard
Sullivan, memorandum on May 1, 1996 coffee, April 29, 1996 (Ex. 30) (memorandum marked
"THE PRESIDENT HAS SEEN 5/1/96").
20
�Despite the fact that this DNC coffee was originally planned to take place in the Roosevelt
81
Room, it actually occurred in the Oval Office itself, with the President taking time to meet with
Wigmore's five $100,000 donors between meetings with Palestinian leader Yasser Arafat and the
82
Rev. Billy Graham.
The use of the Oval Office for this DNC function was not revealed to the
Committee until the production — after repeated requests for such records — of a videotape of a
83
portion of this event taken by the White House Communications Agency. This tape clearly shows
84
the delegation being taken into the Oval Office for coffee. This belatedly-released videotape thus
makes the May 1 coffee the first documented instance in which the Oval Office was used for a
fundraising event.
As noted above. President Clinton had been made aware of the group's $100,000
85
commitments prior to this Oval Office meeting. In case he had forgotten their generosity to the
DNC, however, one of the five, Samuel Rothberg, actually brought up the subject of fundraising in
the Oval Office over coffee and pastries with President Clinton — telling the President that his speech
86
at the funeral of Israeli Prime Minister Rabin had moved him to make his DNC contribution.
81
"Schedule of the President for Wednesday, May 1, 1996, Revised Final", p. 3 (Ex. 31) (listing
Roosevelt Room location).
82
Wigmore interview, pp. 4-5 (discussing Arafat and Graham); Menschel interview, p. 3 (recounting
Graham meeting).
83
For discussion of the White House's delay in producing videotapes to the Committee, see the
section of this report on delays in White House document production.
84
White House Communications Agency videotape, May 1, 1996.
85
See supra text accompanying note 80.
86
Wigmore interview, p. 4. DNC Chairman Donald Fowler and Finance Chairman Marvin Rosen
were also present during this meeting, although they apparently did not contribute to the discussion.
21
�Interestingly, the DNC appeared to have been sufficiently impressed with Barrie Wigmore's
ability to raise huge sums for the Democratic Party from his wealthyfriendsthat it invited him to
become involved in arranging more meetings with the President for "key people," as part of what
Democratic campaign official Alan Patrikoff termed a "fundraising methodology" involving DNC
breakfasts, coffees, dinners, and other events. At some point during the period just before the May
I coffee, Wigmore received a telephone call from Patrikoff, who tried to persuade Wigmore to help
the DNC arrange further Presidential meetings as a way of raising money from wealthy donors.
Wigmore, however, was not interested in such work; after pledging $100,000, he felt he had
87
contributed more than his share to the DNC already.
Wigmore's call from Patrikoff underscores the understanding Wigmore must have had — and
the White House and the DNC clearly had — that the May 1,1996 coffee with President Clinton was
a DNC fundraising tool. Having already been informed by Patrikoff that DNC "coffees" were part
of the party's "fundraising methodology" as a way of enticing contributions from "key people,"
Wigmore recalls having been upset when Ann Braziel subsequently referred to the upcoming May
1 event as a "coffee." Wigmore claims to have bristled at this terminology; he "thought the concept
of a coffee was repugnant" and preferred to think of his group as "all serious players wanting to
discuss the [Clinton Administration's] second term."
88
Nevertheless, it is telling that the word
See id. at p. 5; Manilow interview, p. 2; Menschel interview, p. 3.
87
Wigmore interview, p. 3. Wigmore described Patrikoff as afriendof his who was a venture
capitalist and prominent Clinton fundraiser, as well as the chair of the Democratic Leadership
Council (DLC). Id.
88
Id.
22
�"coffee"was used both by Braziel and in DNC and White House documents relating to the May 1
89
event. Ultimately, Wigmore had understood Braziel's "repugnant" usage correctly: he and friends
were precisely the sort of "key people"fromwhom the DNC's "coffee" system had been designed
to elicit campaign contributions. In Lewis Manilow's words, therefore, the May 1, 1996 event in the
90
Oval Office was indeed a "money coffee."
The June 18,1996 Coffee
The June 18th coffee illustrates not only the fundraising character of the White House coffees,
but the extraordinary degree of control that an individual fundraiser could exert over the DNC
decision-making process and over the personal schedule of the President himself. In pursuit of
substantial campaign contributions, DNC Managing Trustee Pauline Kanchanalak and DNC Finance
Vice Chairman John Huang prevailed over Sullivan's objections, and organized a DNC-sponsored
White House coffee at which the President met with three foreign nationals for over one hour. The
DNC and the White House permitted this coffee to go forward even though they knew that foreign
nationals could not legally contribute to the DNC and that, given the presence of such individuals at
the coffee, the coffee could not be cast as a "community outreach" event. In short, the June 18th
coffee was a fundraiser held in the White House at which the President took time to hear the views
89
See, e.g., Ex. 31 (listing "coffee" on May 1, 1996 with Doug Sosnik at DNC staff contact); Ex. 30
(discussing "coffee with supporters ofthe Democratic National Committee" on May 1, 1996).
Sullivan's memorandum, in fact, described Wigmore's group by noting that they were "[a]ll...
new supporters of the DNC." Id.
90
Manilow interview, p. 3.
23
�of Kanchanalak's foreign clients in return for substantial contributions from Kanchanalak or her
associates.
The June 18, 1996 White House coffee also raises other serious questions, including:
•
Why did the President spend over an hour with three DNC contributors
and a group of foreign nationals without the knowledge of the NSC
and over the objections of DNC executives?
•
Why did the coffee occur despite the strong concerns expressed by the
DNC's Finance Chairman that Kanchanalak might be using the event
for an improper purpose?
•
Why were foreign nationals the only persons originally scheduled to
attend the coffee if this event were really a "community outreach" or
"donor servicing event"?
•
Did the President and/or the DNC believe that they would receive
contributions from foreign nationals?
An analysis of this coffee demonstrates the following: (a) individual DNC fimd-raisers
exercised an enormous degree of control over the DNC, the White House, and the President's
schedule; (b) the DNC's and the White House's claim that the coffee was merely a "donor servicing"
or "community outreach" event is false because, as it was originally planned, no U.S. citizens were
invited; (c) John Huang made an explicit solicitation for financial "support" at the coffee; (d) the
coffee was a fundraiser in connection with which Huang was given credit for raising over $180,000
in contributions from Kanchanalak and her sister-in-law, Duangnet ("Georgie") Kronenberg; and (e)
the actions after the coffee of Kanchanalak and her company, Ban Chang International (USA) Inc.
(BCI), suggest that evidence regarding the coffee has either been withheld from the Committee or
destroyed.
24
�As so often during this investigation, the Committee has been hampered in its ability to learri
all the relevant facts concerning this coffee. Huang and Kronenberg have asserted their Fifth
Amendment right against self-incrimination in response to the Committee's inquiries, and
Kanchanalak fled the United States and has remained in Thailand since approximately December
1996. The following pages recount what information is available about this event.
Pauline Kanchanalak
Bom in Thailand in 1950, Pauline (Pompimol) Kanchanalak, a Thai citizen and a legal U.S.
resident, graduated from Stanford University in 1983 and first worked for the press section of the Thai
Embassy. After leaving the Embassy, Kanchanalak worked in Washington for the Bangkok Post
while both she and her husband, Chupong ("Jeb") Kanchanalak, sought private clients for their new
lobbying busmess. Kanchanalak applied for a position as a Washington lobbyist for the govemment
of Thailand, but was rejected because Thai officials did not believe she had the proper connections.
Kanchanalak subsequently became a lobbyist for Ban Chan Group, a Thai property development
company, and President of Ban Chang International (USA) Inc., a Washington, D.C. based consulting
91
firm.
An early example of Kanchanalak's attempts to use her political influence is the Blockbuster
92
deal before the Ex-Im Bank. In 1996, Maria Haley, a director at the Ex-Im Bank, reportedly tried
91
For additional information on Kanchanalak's background, see Raymond Bonner and Stephen
Labaton, "An Inquiry Clouds a Lobbyist's Success Story," New York Times, February 9, 1997,
p. 26.
92
Haley, a former Arkansas resident with strong political ties to the President dating back to 1979,
assisted then-Govemor Clinton with trade missions to Asia. In 1992, she became the President's
trade advisor (pushing for Arkansas to enter Asian markets). In 1993, Haley was Deputy White
House Personnel Director under Bruce Lindsey. Haley is credited with assisting the placement of
25
�93
to push through an unusual $6.5 million financing deal sought by the Sun Tech Group. A Sun Tech
subsidiary agreed to pay $7.7 million to the Blockbuster video rental company for the rights to operate
more than 100 stores in Thailand that would befinancedby Sun Trust Credit, the Little Rock unit of
a large Florida banking chain. In an effort to obtain financingfromthe Ex-Im Bank for the franchise
of Blockbuster video stores in Bangkok, Kanchanalak reportedly called Haley on June 25, 1996, met
with her on July 16, 1996, and again called her on August 13 and 14, 1996. Allegedly, Huang also
intervened on Kanchanalak's behalf regarding the status of the Ex-Im Bank's decision to provide
financing for Sun Tech. Ex-Im Bank records show that Huang called Haley on June 18, 1996 (the
date of the White House coffee and Kanchanalak's $85,000 contribution to the DNC). In August
1996, Haley was the host of a crucial meeting in her office attended by Ex-Im officials and
Kanchanalak. Eventually, Haley won support from one of the two groups of Ex-Im Bank officials
required for approval, but the Blockbuster deal collapsed amid unresolved questions about the
94
franchise's operations.
In 1994, in a second example of the questionable uses to which Kanchanalak put her political
influence, at the request of Thai govemment, she helped form the United States-Thailand Business
Council ("USTBC"). On September 30, 1994, telephone records indicate that Kanchanalak
Huang at the Department of Commerce. In 1994, the President appointed Haley as a Director of
the Export-Import Bank.
93
The Sun Tech Group is a Thai conglomerate controlled by Sawasdi Horrungruang (President of
Hemaraj Land & Development Public Co., Ltd. and a member of the United States-Thailand
Business Council), a wealthy Thai businessman who approached the Ex-Im Bank in late 1995.
94
See generally Christopher Drew and Jeff Gerth, "Appointee of Clinton Pushed Deal Sought by a
Big Donor," New York Times, January 23, 1997, p. 1.
26
�95
telephoned John Huang at the Department of Commerce.
On that same day, Huang wrote a
96
memorandum urging David Rothkopf, Assistant Undersecretary at the Commerce Department, to
97
support the USTBC and to persuade the President to attend the inaugural ceremony.
In early
October 1994,fiirthermore,Kanchanalak apparently attended meetings at both the White House and
the Department of Commerce, presumably in an attempt to win Clinton Administration support for
the USTBC. Probably not by coincidence, within days of these meetings, she contributed $32,500
98
to the DNC. Although the USTBC never received the grant it wanted, on October 6, 1994, both the
President and the Prime Minister of Thailand (Chuan Leek Pai) attended the USTBC's inaugural
ceremony.
As with so many other DNC contributors during this period, Kanchanalak's political
contributions apparently provided her almost unquestioned access to the White House. Kanchanalak
was invited to the White House approximately thirty-three times between January 1993 and November
99
1996. As a DNC Managing Trustee, in fact, she received assistance from DNC and White House
95
See September 30, 1994 telephone message slips for Huang (Ex. 32).
96
Rothkopf and Jeffery Garten, another Commerce official, met with a group of Indonesian
businessmen at the home of James Riady during President Clinton's trade summit trip to Jakarta in
October 1994.
97
See John Huang, Memorandum to David Rothkopf, Sept. 30, 1994 (Ex. 33). Huang also used his
Arkansas background to urge administration officials to approve projects in which he was involved.
For example, in Rothkopf s September 30, 1994 memorandum, Huang wrote that "[t]here are quite
a few members in this proposed Council from Arkansas. They may want to utilize their contacts to
get this matter squared away directly from the top even if they offend Sandy and NSC." Id.
98
See FECInfo database printouts of individual contributor data for Pauline Kanchanalak (Ex. 34).
99
See Secret Service WAVES records for Kanchanalak (Ex. 35). Kanchanalak's WAVES records
indicate that she was admitted into the White House complex under the names Pauline Kanchanalak
and Pompimol Parichattkul. Id
27
�officials in obtaining special access to the White House and arranging meetings with other influential
individuals. A few examples of such access include: (1) membership in an October 1995 official
Thailand govemment delegation that met with Commerce Secretary Ron Brown, in which
100
Kanchanalak was listed as an advisor to then-Deputy Prime Minister Dr. Amnuay Viravan; (2)
101
special White House access for business associates and friends (i.e., private White House tours);
and (3) three scheduled meetings with Sandra J. Kristoff, a top Asia expert for then National Security
Advisor Anthony Lake.
102
Providing this access, however, was not simply an act of charity. In the early 1990s,
Kanchanalak had become a significant DNC fund-raiser, consistently holding the title of a DNC
Managing Trustee on account of her success in these endeavors. Kanchanalak also served as a cochair of the DNC's Women's Leadership Forum and was actively engaged with the DNC's Finance
Board of Directors. As a result of this status in the DNC, she was invited to and attended numerous
White House events (both official and political) and DNC fundraisers.
Nevertheless, Kanchanalak's status as a significant DNC fundraiser was built upon shaky
foundations. The DNC was forced to return approximately a quarter of a million dollars in improper
campaign contributions which she helped arrange. These contributions, totaling $253,500, were made
100
Memorandum for the Office of SecurityfromJean Kelly, Thailand Desk Officer for the
Department of Commerce, Oct. 18, 1995 (Ex. 36)
101
See Ex. 37 (compilation of certain Kanchanalak requests for private and special White House
tours).
102
These visits also forced a delay in the consideration of Anthony Lake's nomination to be Director
of the Central Intelligence Agency, which Lake later asked be withdrawn. See e.g. John Diamond,
"Campaignfinancingissues cause new delay in Lake confirmation," Associated Press, February
12, 1997.
28
�under the name P. Kanchanalak — and she was duly given credit for them — but were returned when
103
it was discovered that the money actually camefromher mother-in-law, Praitun Kanchanalak. The
DNC also returned a contribution by Ban Chang International after it was discovered that this
104
company was the U.S. representative of a foreign corporation.
Moreover, the contributions credited to Kanchanalak may have been illegal because they
originated from a foreign source. As detailed in Exhibit 38, the source of the funds used in
Kanchanalak's and Kronenberg's DNC contributions was her husband, Chupong Kanchanalak. In
early June 1996, less than two weeks before Pauline Kanchanalak's coffee at the White House,
Chupong Kanchanalak sent $200,000 in wire transfers from a bank in Bangkok, Thailand, into the
U.S. bank accounts of Praitun Kanchanalak and Duangnet Kronenberg. Shortly thereafter, he
transferred an additional $275,510 from Thailand into the bank account of a company called AEGIS
Capital Management — which in tum transferred $275,000 into the U.S. bank accounts of Kronenberg
and Praitun Kanchanalak. This total transfer of $475,000 from Thailand to Praitun Kanchanalak and
Duangnet Kronenberg funded the DNC donations these two women made to the DNC, ostensibly in
the name of Pauline Kanchanalak, in connection with the June 18,1996 White House coffee. Without
105
this infusion, neither of their accounts could have afforded these donations.
103
See Flow chart contribution money trail credited to Kanchanalak and those of her sister-in-law,
Duangnet ("Georgie") Kronenberg (Ex. 38).
104
See DNC Press Release, Nov. 20, 1996 (Ex. 39) (announcing the returned contributions).
105
Id
29
�The June 18, 1996 Coffee
The June 18, 1996 coffee provides an illustration of the extraordinary influence major DNC
contributors had over the White House, the DNC and high ranking Administration officials. Several
points stand out: (1) DNC documents indicate that the June 18 coffee was an illegal DNC-sponsored
White House fundraiser planned and attended by high-level DNC and White House officials; (2) the
timing of the contributions credited to Pauline Kanchanalak, and the DNC reporting method used by
Huang, underline the fact that this coffee was a DNC fundraiser; (3) high-ranking DNC officials
approved this coffee even though the only non-official attendees at the coffee were to be foreign
nationals whom Kanchanalak was lobbying; (4) Huang openly solicited contributions during the June
18th coffee, asking for donations from foreign nationals in the presence of the President; and (5) the
actions of Kanchanalak and her company, Ban Chang International (USA) Inc., after the coffee raise
serious questions as to whether evidence regarding the coffee was withheld or destroyed.
(1)
Briefing Materials
As discussed above, DNC briefing materials prepared for the President make clear that the June
18, 1996 White House coffee was indeed a fundraiser. Among its detailed financial accounts of DNC
specific fundraisers — containing information on each event's projected revenue, what funds had been
sent to federal or non-federal bank accounts, and listings of how much money was "in hand" — the
briefing entitled "Democratic National Committee Budget/Fundraising Presentation to the President
on 6 June 1996" contains explicit information about the June 18, 1996 coffee.
106
See Ex. 16, p. 32.
30
106
Significantly, the
�DNC's entry for this event, which was scheduled to occur less than two weeks after the date of this
briefing, made clear that it was a coffee ofthe fundraising variety. This entry contained the following
information:
PRINCIPAL
DATE
EVENT/SOURCE
PRO. RfVENUE
PRO FED.
PRO
PRO NFl
IN HAND
FED IN
PRO COST
CORP
PORIS
ll-Jia
CoffM
$400,000
M.000
JM0.000
ACTUAL
VARIANCE
COST
J 160.000
S
O
S
O
Two weeks beforehand, therefore, the DNC anticipated that Pauline Kanchanalak's June 18 coffee
107
would raise $400,000.
As this chart indicates, these figures were so specific that they identified the
portion the coffee's projected revenue that would be designated as federal dollars (i.e., "hard money"
that would be available to Clinton/Gore '96 rather than simply to the DNC).
108
In other DNC documents, moreover, the DNC listed Kanchanalak's and Kronenberg's
contributions as derivingfromthe June 18 coffee. A DNC document written on the day after this coffee
entitled "Directed-Donor Checks Received to-Date" lists $130,000 in contributions from Duangnet
Kronenberg and $142,500 from Pauline Kanchanalak — and recounts them as having been generated
by the "John Huang Coffee."
109
All in all, there can be no question that the coffees were the
culmination of Terry McAuliffe's "project" to raise money for the DNC through fundraising events at
the White House, and no question that the June 18,1996 event was part of this fundraising campaign.
107
Id
108
Id.
109
See DNC Ust of "Directed-Donor Checks Received to-Date" (Ex. 40).
31
�(2)
Contribution Credits
Both the timing of the contributions credited to Kanchanalak and her sister-in-law by the DNC
and the DNC reporting methods used by Huang underline this conclusion that this coffee was a
10
fundraiser. Kanchanalak received creditfromthe DNC for an $85,000 contribution on June 18,1996.'
Significantly, the DNC Tracking Form used for this contribution — which confirms the coffee was a
fundraiser by its use of a "Fundraiser Code" — lists Huang as the "DNC Contact" and gives the "Event
1
Location" as "6/18/96 coffee WH." " Duangnet Kronenberg also was credited with contributing
112
$50,000 to the DNC on June 18, and the DNC credited Kanchanalak with contributing another
$50,000 on June 24.
113
The DNC Tracking Form for this last contribution had the same "Source Code,"
"Revenue Code," and "Fundraiser Code" used for the June 18 contribution; this form, too, lists John
114
Huang as the DNC contact.
The DNC Tracking Form is used by the DNC to credit the party representative responsible for
5
soliciting an individual's contribution and to attribute that contribution to the correct event." Richard
Sullivan, the DNC's Finance Director at the time of the June 18 coffee, testified he was aware Huang
no
See DNC Tracking Form for P. Kanchanalak donation of $85,000 on June 19, 1996 (Ex. 41). The
check for her $85,000 donation is dated June 19, 1996, but notations on the Tracking Form indicate
that it was credited as of June 18. Id.
in
Id.
112
See Duangnet Kronenberg, check #211 for $50,000 to DNC on June 18, 1996 (Ex. 42).
113
See DNC Tracking Form for P. Kanchanalak donation of $50,000 on June 24, 1996 (Ex. 43).
114
Id
115
See Deposition of Richard L. Sullivan, June 4, 1997, pp. 161-62.
32
�1,6
was the DNC representative responsible for Kanchanalak's contributions in and around June of 1996.
The DNC briefing schedules covering the actual and projected contributions for the 22 fundraising
coffees (including the June 18 coffee) and Huang's use of the DNC Tracking Form underline the
conclusion that Kanchanalak's contributions were, in effect, a quid pro quo contribution in return for
the DNC organizing a White House coffee for her clients.
(3)
Only Foreign Nationals were Expected to Attend
The original guests for the June 18 coffee included only the President, John Huang, Donald
Fowler, Marvin Rosen and Pauline Kanchanalak and her guests — several top officials from Charoen
117
Pokphand Group ("CP. Group") in Thailand:
Dhanin Chearavanont (Chairman and CEO), Sumet
Chearavanont (Vice Chairman and President) and Sarasin Virapol (Official and translator). Apart from
DNC officials and the President himself, therefore, not a single U.S. citizen or permanent resident alien
118
was expected to attend.
Shortly before the coffee, however, Kanchanalak was forced to invite U.S.
citizens after concerns were raised regarding the appearance of impropriety. After significant pressure
from the DNC to invite at least someonefromthe United States, Kanchanalak finally invited two U.S.
citizens, asking them to attend only on the day before the coffee. Sullivan was so concerned about the
116
Id at pp. 124-25.
117
The CP. Group is Thailand's largest multinational company and one of the largest foreign
investors in the People's Republic of China.
See Deposition of Richard L. Sullivan, June 4, 1997, p. 127. Perhaps not coincidentally, Dhanin
Chearavanont was the only private businessman with whom the President met on his subsequent
trip to Thailand in November 1996.
33
�appearance of this coffee that he invited three additional people to attend: Beth Dozoretz, a DNC
119
Managing Trustee, and Robert and Renee Belfer, also DNC Managing Trustees.
120
Sullivan knew Kanchanalak to have been a DNC fundraiser since 1991, and after learning that
Kanchanalak wanted to "help out in a big way," he talked with Marvin Rosen and Huang "about
121
working with Pauline to get her to come to the table, to make her contribution, to raise some money."
According to Sullivan, in fact, DNC representatives were "always asking her [to] give something to
come to this and that."
122
John [Huang] came . . . at some point in the late spring of '96 and said
that Pauline is ready to do her part. She is thinking about doing between
300 and 500 [thousand dollars] in the next couple of months, do a couple
of events.
123
Principally, in or about the spring of 1996, Huang wrote to Kanchanalak to confirm setting up the June
18 coffee with President Clinton.
124
Huang recommended that Kanchanalak "bring a couple of people
125
to a coffee" to this event.
119
See Deposition of Beth Dozoretz, Sept. 2, 1997, pp. 88-90.
120
See Deposition of Richard L. Sullivan, June 4, 1997, pp. 124-25. Sullivan also testified that "the
White House looked to her as some kind of advisor on Asian issues." Id. at p. 133.
121
Id. at p. 125.
122
Id.
123
Id. at p. 126.
124
See John Huang, Memorandum to Pauline Kanchanalak, undated (Ex. 44) (listing subject as
"Coffee on Tuesday, June 18, 1996).
125
Deposition of Richard L. Sullivan, June 4, 1997, p. 126. Huang's memorandum stated that "[w]e
look forward to seeing you and your guests at the White House coffee on Tuesday, June 18, 1996."
Ex. 44.
34
�As noted, however, because Huang's original list of her invitees contained only three Thai
126
executives from the CP. Group, Sullivan grew concerned that Kanchanalak intended only to invite
her foreign clients to the June 18 coffee. Sullivan expressed concern to Huang that Kanchanalak was
127
using the coffee for an "improper" purpose by inviting only foreign businessmen, telling Huang that
128
Kanchanalak needed to "invite potential donors, American citizens."
Sullivan testified as follows:
when John came up with a preliminary list of who she was going to
bring. It included — the list was her and the three, the three people from
Thailand. I said, John that's not — I recall saying, John that's not what
we're looking for. I don't want to get — I said, I would prefer — you
know, I was thinking she was bringing in some people, fellow people
that she would be working with in fund raising, some people that might
be potential donors, American citizens.
* +*
We want[ed] potential donors and to tell her to, at least, get some more
American citizens, more potential donors, more people who are of
greater use to us down the road.
129
In response to these concerns, Sullivan recalled, Huang replied that the coffee was "very, very
130
important to [Kanchanalak]," that he and Kanchanalak were "adamant" about having the coffee and
131
"insisted" that the CP. Group businessmen be permitted to attend.
126
See Deposition of Richard L. Sullivan, June 4, 1997, p. 127.
127
Id
128
Id. at pp. 127-28, 133.
129
Id. at pp. 127-28.
130
Id.
131
Id. at pp. 128 & 132.
35
Indeed, the June 18 coffee was
�132
the only time Sullivan could recall Huang "expressfing] some emotion" about a particular event. According to Sullivan, Huang
said something to the effect of, you know, as you know, Richard,
Pauline has been a big contributor, a big supporter. It goes back to Vic
Rayier and Ron Brown and she is very high maintenance. She has been
good to us and she is making a — she is going to be good to us and help
us into the fall. This is important to her and I feel strongly about it.
133
In effect, therefore, Kanchanalak's continued contributions to the DNC rode upon whether or not she
was permitted to entertain her Thai clients at the White House.
Ultimately, however, Kanchanalak reacted to Sullivan's concerns by inviting two U.S. citizens
134
to the coffee: Dr. Karl Jackson (the president ofthe USTBC) and Clarke Wallace (its executive
director).
135
Sullivan still had concerns about the prorpiety of Kanchanalak's coffee, suspecting —
132
Id. at pp. 129 & 135.
133
Id at pp. 129-30.
134
Jackson — who in addition to being the president of the USTBC served as director of the Southeast
Asia Program of the Johns Hopkins School of Advanced International Studies — had previously
worked as Assistant to the Vice President for National Security Affairs from 1991 to 1993. Prior to
that, he was the Special Assistant to the President for National Security Affairs and Senior Director
for Asian Affairs at the National Security Council ("NSC"). He also served as Deputy Assistant
Secretary of Defense for East Asia from 1986-1989. Jackson has been employed by Foreign
Exchange Concepts since January 1993. See Karl Jackson, Curriculum Vitae (Ex. 45). As
President ofthe USTBC, Dr. Jackson worked with Wallace and Kanchanalak. Testimony of Dr.
Karl Jackson, Sept. 16, 1997, pp. 4-5.
135
Deposition of Richard L. Sullivan, June 4, 1997, pp. 129, 144-45.
36
�correctly, as it turned out — that neither Jackson nor Wallace would contribute to the DNC.
Sullivan's continued reservations, however, Marvin Rosen approved the coffee.
(4)
136
Despite
137
Huang Openly Solicited Contributions
138
According to Jackson and Wallace, the two U.S. citizens invited at the last minute to the June
18 White House coffee by Pauline Kanchanalak in order to assuage Sullivan's concerns about
fundraising impropriety, Huang explicitly solicited DNC contributions at this event in the presence of
the President.
Jackson, who had agreed to attend the coffee in the hope that he would have the opportunity to
139
discuss with the President the possibility of a Presidential visit to Thailand, met Kanchanalak and
Wallace outside the White House, where she introduced Jackson to Huang for the first time.
140
While
entering the White House security check point, Jackson overheard Kanchanalak and Huang discussing
the DNC.
141
In fact, Kanchanalak pulled Jackson aside before they entered the White House and
142
explained to him that this coffee was sponsored by the DNC; prior to that point he had been unaware
136
Id. at p. 144. Sullivan also expressed concerns that there might be negative press if the President
had a small coffee with foreigners. See Deposition of Richard L. Sullivan, June 5, 1997, p. 81.
137
Deposition of Richard L. Sullivan, June 4, 1997, p. 135.
138
Jackson received his invitationfromKanchanalak through Wallace approximately one or two days
prior to the coffee. Jackson testimony, p. 5.
139
Id at p. 5.
140
Id. at p. 6.
141
Id. at p. 7.
142
Id.
37
�of any DNC role.
143
While on their way to the Map Room — where the coffee was ultimately held —
Jackson met Kanchanalak's clients from the CP. Group: Khun Dhanin, Khun Sumet, and their
144
interpreter, Khun Sarasin. At the Map Room, Jackson met Director of White House Personnel Bob
145
Nash, Don Fowler, Marvin Rosen, Robert Belfer, and Beth Dozoretz.
Jackson was surprised by the
attendance of high-level DNC representatives such as Fowler because, as a former official in the Bush
146
Administration, Jackson was aware that it was illegal to conduct fundraising inside the White House.
Once they had been joined by the President and everyone was seated in the Map Room, Jackson
147
recalled that Fowler stood up and welcomed everyone. Jackson then recalled the following sequence
of events:
Fowler said, "It's a pleasure to welcome all of you here to this coffee on
behalf of the Democratic National Committee, and these coffees are
important so that the President can maintain contact with people. This
is particularly — this is important, but it is particularly important in an
election year and this is an election year, arguable [sic] the most
important since the one that brought Abraham Lincoln to this house."
148
After these introductory remarks by the DNC Chairman, Jackson testified, the party's Vice Chair for
Finance gave some brief comments of his own:
143
Id.
144
Id.
145
Id at pp. 8-9.
146
Id. at pp. 14-15.
147
Id at pp. 10-11.
148
Id. at p. 10-11.
38
�Huang stood up and said that he would like to reiterate the welcome of
Chairman Fowler and that he agreed with Chairman Fowler that this was
an election year, and he went on to say, "Elections cost money, lots and
lots of money, and I am sure that every person in this room will want to
support the re-election of President Clinton."
149
150
Wallace confirms the substance of these remarks.
Jackson was shocked that the DNC had sponsored
151
the June 18th coffee and, in particular, found Huang's statements entirely inappropriate.
It seemed
clear to him that Huang's comments were a solicitation for political contributions, and he was
152
astounded such statements had been made in the presence of the President.
The coffee lasted for approximately 90 minutes, with the CP. Group officials speaking for most
of the time.
153
Jackson also recalled that he and Kanchanalak spoke briefly.
154
During the course of the
coffee, Jackson recalled that someone raised the possibility that the President might stop in Thailand
149
Id. at pp. 10-11.
150
Wallace recalled, however, that Huang's statements may have been made toward the end of the
coffee rather than at its outset. Testimony of Clarke Wallace, Sept. 16, 1997, pp. 105-07.
Jackson's and Wallace's recollection of the liming of Huang's statements may differ, but their
memory of the substance of his statements is entirely consistent.
151
Jackson testimony, pp. 10-12.
152
Id at pp. 14-15. This testimony is thus far the only direct evidence of DNC solicitations for money
in the White House. Other solicitations may well have occurred. WHCA's videotape of an April
1996 White House coffee, for example, shows DNC Chairman Fowler commencing his welcoming
remarks to the guests by praising them as "loyal and generous supporters." White House
Communications Agency videotape, April 1, 1996. As it was WCHA's practice — in the 44 tapes
of White House coffees hitherto released by the White House — to videotape only thefirstfew
moments of each coffee, however, no record is available of the rest of Fowler's comments to these
"generous" donors assembled at the White House on that occasion.
153
Jackson testimony, pp. 12-13.
154
Wat p. 13.
39
�155
while in Asia to attend the upcoming APEC summit. After hearing this comment, Jackson passed
an encouraging note to the President, stating that were this to occur, President Clinton would be the first
156
President since Richard Nixon to visit Bangkok.
Jackson's recollection of the events at the June 18th coffee is supported by sworn affidavits
submitted by two of his close associates, R. Roderick Porter and John Taylor, respectively the President
and Chairman of Foreign Exchange Concepts — who recall Jackson's contemporaneous accounts of
the coffee.
157
According to Porter, just after Jackson returned from the coffee on June 18, 1996,
[he] explained that he had just attended a small White House coffee
with," among other people, the President, members of the Charoen
Pokaphand Group Company, Ltd. ("CP. Group"), Don Fowler and other
gentlemen affiliated with the Democratic National Committee.
Dr. Jackson stated that he believed the event was an improper
solicitation for money by the DNC in the White House. Dr. Jackson
explained that he was upset because one of the gentlemen affiliated with
the DNC had solicited money in the White House in the presence of the
President.
158
"[Wjithin a day or two of June 18, 1996," Taylor recounted, Jackson expressed the view that he
"believed that the White House coffee was an improper 'shakedown' for money from the foreign
159
businessmen in the presence of the President."
155
Id. at pp. 13-14.
156
Id
157
See Affidavit of R. Roderick Porter, Sept. 15, 1997 (Ex. 46); Affidavit of John Taylor, Sept. 15,
1997 (Ex. 48). Porter has known Jackson personally and professionally since January 1993 and
they shared the same office in the summer of 1996. See Ex. 46.
158
Id.
Ex.47.
40
�The credibility of Jackson's testimony, which of course reflects badly upon Kanchanalak, is
160
further bolstered by his continuing personal and professional relationship with her.
He speaks with
Kanchanalak over the phone a few times each month and believes they continue to have a good working
161
relationship.
Far from having any interest in hurting his colleague after the June 18 coffee, in fact,
Jackson has gone out of his way to help Kanchanalak. After Kanchanalak told him that she was closing
Ban Chang International because of negative publicity surrounding her participation in the June 18
162
coffee, for example,
as its only client.
Jackson opened a new company, Global Investments, Inc., with Kanchanalak
163
164
Significantly, Wallace's recollection of the June 18 coffee corroborates the essentials of
Jackson's account. Wallace knew that Kanchanalak was a financial contributor to the DNC, and was
165
told by Usma Kahn, a BCI employee, that Kanchanalak was also a DNC Managing Trustee. Indeed,
160
See Jackson testimony, p. 19.
161
Id. at pp. 15 & 19. At no point before giving his testimony before the Committee had Jackson
spoken with Kanchanalak about what transpired at the June 18 White House coffee. Id at p. 15.
162
Id at p. 18.
163
Id at pp. 112-13.
164
Clarke Wallace graduatedfromthe University of Virginia in 1990 and then taught English in
Thailand for approximately eight months. After interviewing with Kronenberg and Kanchanalak,
Wallace began working for the USTBC on March 1, 1995. See Deposition of Clarke Wallace,
August 27, 1997, p. 5. The USTBC shared office space with Kanchanalak's company. Ban Chang
International ("BCI"), which was engaged in the development of new business relating to Thailand
(i.e., establishingfranchisesand joint ventures between U.S. and Thailand businesses) and which
has the CP. Group as one of its most important clients. (As a result of sharing offices, employees
of USTBC helped with certain BCI matters, such as answering the phone and general clerical
work.) For a period of time, BCI also shared office space with Ban Chang Group (owned by
Chupong Kanchanalak) in Bangkok. Id. at pp. 8-11.
165
Id. at p. 16.
41
�building upon her relationship with the DNC, Kanchanalak occasionally provided Wallace and other
166
employees the opportunity to attend White House events, among them a White House ceremony in
167
the summer of 1995 on the occasion of the President's departure on a trip to Michigan.
Wallace also
knew that Duangnet Kronenberg dealt with the DNC on Kanchanalak's behalf, and that she would call
the DNC to arrange for business associates and other individuals to attend White House events, among
them White House tours, Presidential radio addresses, and the annual White House Easter Egg Roll.
168
In addition, Wallace recalled that Susan Lavine and Lorin Supina, both DNC affiliates, frequently
called for or visited Kanchanalak, and that Kanchanalak attended business-related events at the White
House attended by the President or the First Lady.
169
Wallace also noted that Huang visited and called Kanchanalak at BCI's offices.
170
In fact,
Wallace remembered, Huang visited BCI's offices and had a private meeting with Kanchanalak only
171
a day or two before the June 18 Coffee. After the meeting, Wallace learned from Kanchanalak that
172
she was arranging a coffee at the White House for the chairman of the CP. Group.
She then asked
Wallace to attend the coffee as well, and told Wallace to inform Jackson that he also was invited to
166
Id at pp. 17-18.
167
Id
168
Id. at pp. 18-20.
169
Id. at pp. 21-22 & 26.
170
Id. at p. 26.
171
Id. at p. 31-32.
172
Id. at p. 32. The CP. Group delegation arrived in Washington, D.C a day before the coffee and
left D.C. approximately two days after the coffee. See id. at pp. 58-59. It appears that the June 18
coffee was a primary reason the CP. Group's executives came to Washington.
42
�173
attend.
In instructing Wallace to invite Jackson, however, Kanchanalak behaved somewhat oddly,-
requesting that Wallace not follow the usual procedure of sending Jackson a written memorandum.
Instead, Kanchanalak requested that Wallace telephone Jackson in order to discuss the White House
visit.
174
She said at some point not to fax information to Karl but call him on the
phone because this was a really unique, special opportunity and not
everyone gets to do this sort of thing and just exercise caution by just
telling him on the phone.
175
On the day of Kanchanalak's meeting with Huang, Wallace also saw a seating chart for the coffee in
Kanchanalak's office.
176
Most significantly, Wallace confirmed Jackson's recollection that Huang solicited contributions
at the June 18 coffee. Wallace had met Huang once or twice before the coffee and knew that he had
177
worked for the Department of Commerce.
At the coffee, Wallace learned that Huang no longer
worked at the Department of Commerce, and that he was now working for the DNC — and least
178
through the 1996 election. Once inside the Map Room, Wallace also met Dozoretz, Rosen, Fowler
173
Id.
174
Id at p. 33. Jackson maintained a separate officefromthe USTBC in June of 1996.
175
Id. at pp. 32-33. Kanchanalak also indicated someone might have the opportunity to fly on Air
Force One to Thailand. Id at p. 34.
176
Id. at p. 42.
177
Id. at pp. 30-31.
17»
Id. at pp. 43-44.
43
�179
and Nash,
and recalls thinking at the time that Kanchanalak must have been very important to the
180
DNC in order for Rosen and Fowler to attend.
Wallace thought it odd to have so many DNC
officials at the coffee, and had the (correct) impression that the coffee had been arranged in conjunction
with the DNC.
181
According to Wallace, after some opening remarks by Fowler, a brief statement by the
President, and Kanchanalak's introductions of the Thai officials, CP. Group Chairman Dhanin
182
Chearavanont spoke for approximately 30 minutes.
183
questions.
After this, Jackson and Belfer posed some brief
As Wallace later recounted, the President then introduced him to the assembled guests,
describing Huang as "someone who [was] afriendand someone who had done a lot of good work for
184
the Democratic National Committee."
And then John Huang spoke and he said that the President, thank you
very much for being here, President, and I think speaking more to the
table, he said, as you know, he said, this President is the right man to
lead the country into the 21st century, into the next millennium, and I
think we have one small hurdle or something like that, which is the
election in November and I'm sure you all will do everything you can
1 7 9
Id. Wallace knew Fowler was Chairman of the DNC and he learned that Rosen was "Chairman of
Finance" for the DNC at the coffee. I d at pp. 45-46.
180
Id. at p. 46.
181
Id. at pp. 47-48.
182
The topics discussed by Chearavanont included how U.S. companies could successfully conduct
business in China and the pending transfer of Hong Kong to China. Id at p. 53.
183
Id. at pp. 52-54.
184
Id. at pp. 54-55.
44
�to support that, support the-everyone at this table will do what they can
to support the President.
185
186
Wallace also recalled that Huang probably made a comment about "how expensive elections were."
To Wallace, as to Jackson, Huang's comments had very clear implications: the DNC was asking
the President's coffee guests for campaign contributions. These remarks seemed to be aimed at
[h]elping to either to help to raise the money or help to strengthen the
DNC somehow either through networking to get people to support the
President or to networking to get people to give donations.
187
After recounting the events of June 18 reviewing the relevant documentation, Wallace concluded that
the coffee had been a fundraiser:
Q:
Now, you've seen checks from a P. Kanchanalak the day after the coffee
for $85,000 and a week or so later for $50,000 and you've now seen a
DNC document projecting incomes from a variety of different coffees,
you were at the coffee, you gained an impression and sense of the things
that were at the coffee. Seeing all that, as you sit here today, do you
have an understanding of what exactly was going on at this coffee, at
this particular June 18th coffee you attended?
A:
It appears it was a Fund-raiser.
188
After the coffee concluded and the CP. Group executives left the White House, Jackson,
Wallace and Kanchanalak went to the NSC offices in the Old Executive Office Building to visit Bill
Wise, who had worked for Jackson when he was Assistant to the Vice President for National Security
183
Id.
186
Id. at p. 56.
187
Id. at p. 55.
188
Id. at pp. 85-86.
45
�Affairs.
189
Wise was surprised to hear that the President had just hosted a meeting with senior,
executives from Thailand's CP Group. Wise had no prior knowledge of this event or the visit ofthe
190
Thai businessmen,
191
President.
and could find no mention of this event on the NSC's schedule for the
Jackson found the NSC's ignorance of the meeting troubling; during the Bush
Administration, it was his understanding that the NSC was kept informed of the President's schedule 192
and that policy-making and fundraising were considered separate activities.
The NSC's ignorance
in this case increased Jackson's suspicion that the DNC and the President had used the coffee to
193
improperly — perhaps even illegally — solicit campaign contributions in the White House.
(5)
Other Attendees' Recollections
The other persons attending at the June 18 Coffee — Dozoretz, the Belfers, Rosen, Fowler, and
Nash — claimed not to recall hearing Huang solicit DNC contributions in the Map Room. On this
point, however, their memory may be influenced by their strong affiliations with the DNC, the White
House, or both. More importantly, while they cannot recall Huang making the remarks recounted in
detail by Jackson and Wallace, these other attendees recall so little else of substance concerning the
coffee that their lack of memory in this particular respect is hardly surprising.
189
See Jackson testimony, p. 30.
190
Id at pp. 30-31.
191
Id. Richard Sullivan claims to have understood that Karen Hancox of the White House Political
Affairs Office had vetted the June 18th coffee attendees with the NSC. See Deposition of Richard
L. Sullivan, June 4, 1997, p. 137. See also the section of this report on White House vetting
procedures.
192
Jackson testimony, pp. 91 -92.
193
Id. at pp. 49-50.
46
�Dozoretz was the DNC fundraiser responsible for the Belfers' invitation to the coffee. She was
a successful DNC fundraiser and a personal friend of the President and the First Lady.
194
She was a
founding member of the Women's Council for the Senate, and had helped organize the DNC Women's
195
Leadership Forum in 1993.
Dozoretz and her husband raised approximately $120,000 for the
196
Clinton/Gore campaign in 1992.
Between 1992 and 1996, Dozoretz and her husband personally
contributed over $100,000 to Democratic campaigns and candidates and helped arrange corporate
197
contributions to the Democratic Party totaling approximately $200,000. She consistently earned the
status of DNC Managing Trustee between 1992 and 1996, either by personally contributing more than
$50,000 or by raising in excess of $250,000 annually. In fact, she chaired the DNC Managing Trustee
198
program for approximately 10 months.
Dozoretz's other fundraising achievements include: raising
199
approximately $100,000 at the kick-off event for Clinton/Gore '96; planning a tea event for the First
200
Lady in October of 1995 for women who had raised a minimum of $5,000; and raising more than $2
194
See Dozoretz deposition, pp. 12-16. Indeed, Dozoretz played golf with the President the day before
her deposition by the Committee and less than two weeks prior to her hearing testimony. Id. 'at
p. 72.
195
Id at pp. 8, 12; see also Beth Dozoretz, personal statement and resume (Ex. 48).
196
See Dozoretz deposition, p. 10.
197
Id. at pp. 20-23. Dozoretz also is listed in the Vice President's DNC fundraising call sheets. See
DNC Finance Call Sheet (Ex. 49).
198
See Dozoretz Deposition, pp. 27, 29.
199
Id. at pp. 32-33.
200
Id. at p. 39.
47
�201
million for Democratic gubernatorial, U.S. Senate, and Presidential candidates since 1994.
Dozoretz
202
also spoke frequently with White House officials such as Harold Ickes, Maggie Williams, Doug
203
204
205
Sosnik, Evelyn Lieberman, and Ron Klain about her DNC fundraising activities.
In March or April of 1996, Robert and Renee Belfer agreed to contribute $100,000 to the DNC
206
207
through Dozoretz. Belfer contributed the first $50,000 of this total in May of 1996, contributing
an additional $40,000 after the June 18 coffee. Renee Belfer's sister contributed the final $10,000,
208
which was credited toward the Belfers' $100,000 commitment. At the time Robert Belfer made the
$100,000 commitment, Dozoretz told him it was possible he would be able meet with the President.
209
Belfer claimed not to have believed that this contribution was a quid pro quo for the meeting, but
Dozoretz confirmed that although no specific amount was explicitly requested, guests at such coffees
were expected to make substantial contributions:
201
Id. at p. 43. Dozoretz also attended two gatherings at local D.C. hotels to review DNC television
advertisements. The first meeting was in the fall of 1995 and consisted of less than twenty people
(including the President, Rosen and Fowler). Id at pp. 56-58. The group previewed
advertisements, and Rosen explained the need to raise extra money to pay for them because of
their extraordinary expense. Id at p. 61. The second meeting was in the spring of 1996 and
celebrated the success of the advertisements. Id.
202
Id. at p. 47.
203
Id at p. 48.
204
Id. at pp. 128-29.
205
Id at p. 129.
206
See Deposition of Robert Belfer, Sept. 6, 1997, pp. 8-9.
207
Id. at p. 9.
20«
Id. at p. 70.
209
Id. at p. 37.
48
�I don't think somebody would really be considered to attend (a coffee) if they
hadn't contributed at a significant level. It could have been $25 (thousand). It
could have been 50 (thousand), but conversely, it was not that if you — if you
contributed X-amount of dollars, you would go to one of these gatherings.
210
2
Richard Sullivan was aware of Dozoretz's fundraising endeavors on behalf of the DNC. "
Indeed, it was Sullivan who involved her in the June 18 event, calling Dozoretz approximately two
weeks beforehand to inform her that she and the Belfers might be able to attend a White House
coffee.
212
At this point, however, Dozoretz was unsure of the event's exact location and time.
213
In contrast to the specific recollections of Jackson and Wallace, in their testimony to the
Committee, Dozoretz and the Belfers had only a vague memory of the details of the June 18 coffee.
The Belfers could not say, for example, how long in advance of the coffee Sullivan had first contacted
them, and remembered few details of the coffee itself.
214
Neither Dozoretz nor Belfer could recall
2
Huang soliciting contributions at the June 18 coffee as recounted by Jackson and Wallace. " Indeed,
though she professed to be quite certain that Huang had not solicited money in the White House,
210
See Dozoretz deposition, p. 79.
211
Id at p. 46.
212
Id. at pp. 88-89.
213
Id. at pp. 89-90.
214
See Belfer deposition, pp. 12-13.
215
See Dozoretz deposition, pp. 116-17; Belfer deposition, p. 25. Dozoretz testified that "[i]f he said
anything, it was inconsequential." See Dozoretz deposition, p. 117. She did not recall Huang
saying anything about the election, id at pp. 142-43, or expressing the hope that everyone at the
coffee would "support" the President. Id. at p. 143. Dozoretz stated that if Huang had made those
types of statements she would have been upset because she "had two of [her] donors in the room"
and she "would have been very sensitive to anything that would have been brought up about [her]
donors being solicited by anybody but [her]." I d at p. 143.
49
�Dozoretz could apparently remember nothing else about the remarks made at the coffee. She could not
216
recall, for example, the substance of Fowler's opening remarks, anything of what Kanchanalak said
217
218
to the assembled guests, anything of what Jackson said, or whether there were any closing remarks
at all.
219
coffee.
Dozoretz could not even remember anything of what the President himself had said at the
220
It is also noteworthy that Dozoretz had meetings with Robert and Renee Belfer and with White
House attorneys before her interview and deposition before the Committee. Dozoretz had conversations
with former Counsel to the President Jack Quinn and with White House Special Counsel Lanny Breuer
221
for example, prior to her meetings with Committee staff. Dozoretz also admitted that she had spoken
with the Belfers about the June 18, 1996 coffee before they met with Committee staff.
222
For his part, DNC Finance Chairman Marvin Rosen recalled attending the June 18 coffee with
223
Kanchanalak, Belfer, Dozoretz and Huang.
As with Dozoretz and the Belfers, he could not recall
anyone "making any comment relating to solicitation of funds for the DNC and/or the Clinton Gore
216
Id. at p. 108.
217
Id. at pp. 109 & 118.
218
Id at p. 114.
219
Id. at p. 116.
220
Id. at p. 118.
221
Id. at pp. 68-72.
222
Id. at pp. 148-49.
223
See Deposition of Marvin S. Rosen, May 19, 1997, pp. 48-49.
50
�224
225
campaign at that coffee," and did not remember Huang "making any statement at the coffee." He
226
also did not recall Kanchanalak making any remarks.
His only recollection of the President's role
was that the President addressed the group; he did not remember anything about what the President
said.
227
Rosen also testified that while he was not sure what he believed at the time of the June 18
coffee, he now believed that Kanchanalak may have used her clients attendance at the coffee to meet
her commitment to raise a certain amount of funds for the DNC.
228
If anything, the memories of DNC Chairman Donald Fowler and White House Director of
Presidential Personnel Bob Nash were worse than that of Dozoretz, the Belfers, and Rosen. Fowler
229
remembered attending the June 18 coffee, but claimed to have no clear recollection of it.
230
In fact,
Fowler said that he could not recall whether Huang had attended this event — or even whether any of
231
the other guests had done so.
Like Fowler, Nash could recall essentially nothing about the coffee.
232
He could not remember the date of the event or the names of all the attendees, he could not recall
any of the specific topics discussed by the CP. Group executives, and he did not know whether the
224
Id. at p. 49.
225
Id.
226
Id at p. 50.
227
Id. at p. 51.
228
Id at p. 255.
229
See Deposition of Donald L. Fowler, May 21, 1997, p. 135.
230
Id. at p. 311.
231
Id. at pp. 135-36.
232
Deposition of Bobby Nash, June 25, 1997, p. 268.
51
�233
President had made any opening statement.
Since they could essentially recall nothing about the June
18 coffee at all, their failure to remember the Huang solicitation detailed by Jackson and Wallace is
234
hardly surprising.
Jackson's and Wallace's testimony about the June 18 coffee, therefore, stands
uncontradicted.
(6)
Possible Withholding or Destruction of Evidence
235
On or about January 1, 1997, Ban Chang International was closed.
In December 1996, FBI
agents visited BCI's offices in the execution of a criminal search warrant, acting on information
236
suggesting that the company may have been destroying documents sought by federal investigators.
Before the company closed, BCI employee Usma Kahn removed information from Ban Chang files
237
pertaining to projects intended for a new company called Global Investments.
happened to these files.
238
It is not known what
In addition, an outside contractor (who was a friend of Kahn) removed
239
certain related informationfromBCI's computer hard-drives, copying it onto diskettes.
240
seem to have disappeared.
These also
According to Wallace, such removal of information from the hard drives
233
Id. at pp. 272-73.
234
See, e.g., id. at p. 275.
235
See Wallace deposition, p. 63.
236
Id at p. 71.
237
Id. at p. 64.
238
See id. at p. 65.
239
Id. at pp. 65-66.
2 4 0
Wallace did not know what Kahn did with the diskettes and did not have access to the diskettes
when responding to the Committee's subpoena. Id. at pp. 66-68.
52
�241
was unusual.
More ominously, after the FBI raid, Kanchanalak told Wallace that he would need a
lawyer; she even offered to help pay for one. In a telephone conversation, Wallace
told her about the FBI raid, I told her about the interest [in] the CP
Group and our donations and she mentioned the fact that I needed a
lawyer to represent me and she talked about how she may be able to help
financially and then we talked about the U.S. Thailand Business Council
projects like four or five things I was working on. And she had some
knowledge of them because she was in Thailand and was working with
Jeb.
+ **
[Kanchanalak then] told me . . . to be careful about, you know, what I,
be careful when I think about what I remember about the coffee because
it could end up being very controversial or cause some problems for
people.
242
Furthermore, before Wallace was to testify before a federal grand jury inquiring into campaign finance
abuses, Kanchanalak proposed helping him withfinancialexpenses resultingfrominvestigations into
243
possible wrongdoing in connection with the June 18 coffee.
Wallace, however, declined both this
offer of money and Kanchanalak's suggestion that he "be careful" about "what I remember about the
coffee."
Conclusion
There can be no question that the DNC used White House coffees, overnight stays, and other
White House perquisites as explicit fundraising events to pay for the extraordinarily expensive media
2 4 1
Id. at p. 69.
2 4 2
Id. at pp. 72 & 74-76.
2 4 3
Id. at pp. 76-77.
53
�campaign the Democratic Party deemed necessary to save President Clinton and Vice President Gore
from electoral defeat in 1996. For this reason, as George Stephanopoulos put it, money "became a near
obsession at the highest levels" of the DNC and in the White House. Driven by this "obsession," the
DNC and White House "pulled out all the stops" to raise money, and were not above using the White
244
House for this purpose —just as Terry McAuliffe had suggested in his 1994 proposal for various
245
DNC fundraising "projects." While not every overnight visit and White House coffee served this
purpose, DNC and White House documents and witaess testimony show that the Democratic Party and
the White House unquestionably organized certain coffees and other events in the White House
specifically as fundraisers — even to the point of assigning "projected revenue" totals, assigning
246
"Fundraiser Codes," and tracking contributions given in connection with each event.
These events
netted approximately $31.5 million for the DNC.
The May 1, 1996 coffee, was but one example of what Alan Patrikoff described as the DNC's
use of coffees in its "fundraising methodology." There is no question, therefore, that the May 1, 1996
Oval Office coffee was a DNC fundraising event. Its participants were invited only after they had each
pledged to give $100,000 to the Democratic Party; these commitments were well known to the event's
DNC organizers, and the President himself was informed of them in advance of the meeting. Nor is
there any serious question that these donations and the invitations to the May 1 group were causally
244
Stephanopoulos, supra note 2.
245
See also the section of this report on the White House's thirst for money during the 1995-96
election cycle.
246
It is illegal to solicit campaign contributions on govemment property. See 18 U.S.C. § 607.
54
�connected. The organizer of the group, Barrie Wigmore, urged at least one of its participants, for
example, to make a contribution as part of this group because doing so would make possible a visit with
President Clinton. Wigmore, in tum, had himself been told by DNC fundraisers that the Democratic
Party used White House coffees as part of its "fundraising methodology" — as a way to elicit donations
from "key people" — and knew that the DNC considered the May 1 event to be just such a coffee. It
was, in other words, what Lewis Manilow termed a "money coffee," which occurred in the Oval Office
itself, an undeniably "public" space within the White House complex. This coffee constitutes,
therefore, the first instance uncovered by the Committee of President Clir.ton's use of the Oval Office
as part of his party's "fundraising methodology."
If anything, the June 18, 1996 coffee was an even more blatant and inappropriate use of the
White House for DNC fundraising. It was organized, over the objections of the DNC'sfinancedirector,
in order to provide an opportunity for the President to meet with business executives from Thailand's
CP. Group in return for donations from and arranged by Pauline Kanchanalak, who herself funded
these contributions with money from sources in Thailand. The specific details of how and why this
coffee came about remain unclear because the three key figures — Huang, Kronenberg, and
Kanchanalak — have either invoked their Fifth Amendment privilege against self-incrimination or have
simply fled the country.
Moreover, when all the evidence is considered, it appears that at this June 18 coffee, Huang
openly asked for DNC contributions in the Map Room at the White House, in the presence of the
President. Jackson and Wallace had a clear, vivid, and consistent recollection of Huang's solicitation.
The Minority has alleged that Jackson invented this story out of partisan animus supposedly originating
55
�in his status as a registered Republican and as a former assistant to former Vice President Dan Quayle.
As recounted above, however, Jackson's testimony is supported by Wallace — who has never
contributed to either party — and is corroborated by sworn statements from Jackson's business
associates attesting to his consistent and contemporaneous memory of these events. Both Jackson and
Wallace, in fact, continue to maintain personal friendships and business relationships with
Kanchanalak. By contrast, Dozoretz and the Belfers are fervent supporters of the President and the
DNC, and raised or contributed several hundred thousand dollars on behalf of the Democratic Party in
1996 alone. Moreover, neither Dozoretz nor any of the other guests apparently remember enough detail
about the events of June 18 to be able to say anything about it with certainty — and certainly not
enough to enable them to cast serious doubt upon the Jackson and Wallace accounts simply on the
strength of their claimed inability to recall Huang's comments. At this point, the only people who
might be able to clarify this matter have refused to cooperate with the Committee: Huang has invoked
the Fifth Amendment, Kanchanalak has fled the country, and President Clinton has declined to testify.
56
�FUND-RAISING CALLS FROM THE WHITE HOUSE
In the aggressive drive to raise funds to support the DNC's advertising on behalf of thePresident, new ways were found to solicit contributors, such as using the public facilities of the
White House to host coffees and other fund-raising events. In addition, the President and the Vice
1
President made fund-raising telephone calls from the White House. In fact, evidence suggests that
2
the Vice President himself was the originator of the idea that he make such calls. In furtherance of
these plans, DNC Finance Chair Marvin Rosen, Finance Director Richard Sullivan, and others within
the DNC's Finance Division prepared "call sheets" for the President, Vice President, and First Lady
to suggest potential donors whom they might contact, and to encourage them to actually make the
3
calls.
i
There is evidence suggesting that the First Lady also may have made fund-raising
phone calls. Memoranda received by the Committee from the DNC indicated that
there was some consideration given to having the First Lady make fund-raising
telephone calls in the period of late 1995. Memorandum from Terence R.
McAuliffe to Harold Ickes October 22, 1994 (Ex. 1), and 12 additional call sheets
were also received from the DNC.
The Committee interviewed by telephone a number of the potential donors listed
on those call sheets. Based on this work, the Committee concludes that it was
unlikely that the First Lady actually made any of the fund-raising telephone calls
contemplated by the call sheets.
2
In re Albert Gore. Jr.. Notification to the Court Pursuant to 28 U.S.C. § 592(b) of
Results of Preliminary Investigation, Dec. 2, 1997, p. 7 (Ex. 2).
3
Deposition of Marvin Rosen, May 19, 1997, pp. 107-29; Memorandum from Don
Fowler et al. to Harold Ickes, November 20, 1995 (Ex. 3); Memorandum from
Harold Ickes to the President and the Vice President, November 28,1995 (Ex. 4);
Deposition of Richard Sullivan, June 4, 1997, pp. 178-99; Memorandum from
John Raffaelli to Richard Sullivan (undated) (Ex. 5).
�The fund-raising calls became an issue in the investigation because a federal felony statute,
4
18 U.S.C. § 607, prohibits soliciting or receiving political contributions in a federal workplace. In
the early stages of the investigation, and as explained more fully below, the Committee discovered
that the President and Vice President may have made fund-raising telephone callsfromthe White
House, thereby potentially implicating section 607.
Evidence of Fund-raising Phone Calls
Vice President Gore
On March 2, 1997, an article by Bob Woodward entitled "Gore Was 'Solicitor-in-Chief in
'96 Reelection Campaign" appeared on thefrontpage of The Washington Post. This was among the
first of a series of articles in numerous publications that detailed the Vice President's fund-raising
activities during the 1996 campaign. The picture that emerged from these articles was one of the
Vice President being among the most aggressive, and enthusiastic, fund-raisers within the
Clinton/Gore '96 re-election team. The Woodward article described a number of instances in which
the Vice President made fund-raising telephone calls. One unidentified donor who received such
a call described the Vice President's sales pitch as "revolting." Another stated that the call that he
5
received from the Vice President had "elements of a shakedown."
On the afternoon of March 3,1997, and in response to a number of press inquires regarding
his fund-raising activities which had been posed earlier in the day to White House Press Secretary
Mike McCurry, the Vice President went to the White House press room for an impromptu press
4
5
18 U.S.C. § 607 is quoted and discussed infra.
Bob Woodward, "Gore was 'Solicitor-in-Chief in '96 Reelection Campaign,'
The Washington Post. March 2, 1997, pp. A l , A18.
�conference. In this press conference, it was revealed for the first time that the Vice President made
some of the fund-raising phone calls from his White House office. Vice President Gore stated that
6
he had charged the calls to a DNC credit card. The Vice President also stated his belief that
everything he did regarding the calls was legal, but that he had decided, as a matter of policy, not
to make such calls ever again. In the course of the press conference, the Vice President stated
several times that he had asked potential donors "to help raise campaign funds," "to ask people to
make lawful contributions to the campaign," to ask potential donors "to support our campaign," to
7
"help[] to raise funds for the campaign," and "to help raise money for the campaign."
The Vice President was questioned extensively about the legality of making political fundraising calls from his White House office. In response, the Vice President repeated seven times that
he had been advised by his legal counsel that there was "no controlling legal authority"or case that
8
proscribed his conduct in making these calls. Nonetheless, the Vice President acknowledged that
in the past, he had taken conscious steps to make prior fund-raising calls ~ presumably of private
The Vice President's office later issued a correction, stating that the Vice
President had in fact used a credit card issued by the Clinton/Gore '96 campaign,
not one issued by the DNC. (Of course, Clinton/Gore '96 can only accept
contributions of "hard money.") In addition, the Committee later learned that a
number of the calls had not been charged to any credit card at all, but rather were
charged to official White House telephone bills. The DNC later reimbursed the
govemment for the costs of such fund-raising calls that were originally charged to
official govemment telephones. See infra, text accompanying notes 17-18.
White House Press Release, Press Briefing by the Vice President, Mar. 3, 1997,
pp. 1-2, 7-8. (Ex. 6).
Id. at pp. 2-7.
�persons not located in federal buildings - away from official telephones in the White House. " I
9
went to the DNC on one occasion I believe in October of 1994 to help raise money for the party."
Based on this press conference, the Vice President's telephone calls were one of a number
of subjects that a majority of the members of the Senate Judiciary Committee asked Attorney
10
General Reno to investigate as possibly warranting the appointment of an independent counsel.
The Judiciary Committee members believed that the facts known to date constituted specific and
credible evidence that a covered person may have committed a federal crime." Specifically, the
Judiciary Committee members suggested that the Vice President's fund-raising telephone calls might
constitute a violation of 18 U.S.C. § 607(a), which provides:
It shall be unlawful for any person to solicit or receive any
contribution within the meaning of... the Federal Election
Campaign Act of 1971 in any room or building occupied in
the discharge of official duties.... Any person who violates
this section shall be fined under this title or imprisoned not
more than three years, or both.
On April 14, 1997, however, the Attorney General rejected the Judiciary Committee
members' request that she appoint an independent counsel to investigate, among other things, the
Vice President's telephone fund-raising calls. She listed two reasons to support her view that there
was no specific and credible evidence that the Vice President's telephone calls were illegal. First,
in her view, section 607 "specifically applies only to contributions as technically defined by the
9
Id. at p. 6.
10
Letter from Senator Orrin Hatch et al. to Attorney General Reno, March 13, 1997
(Ex. l);see 28 U.S.C. § 592(g)(1).
11
See Ex. 7; 28 U.S.C. § 591(b).
4
�2
Federal Election Campaign Act (FECA) ~ funds commonly referred to as 'hard money."" Second,
she stated that "there are private areas of the White House that, as a general rule, fall outside the
scope of the statute, because ofthe statutory requirement that the particular solicitation occur in an
area 'occupied in the discharge of official duties.'"
13
Since there was no evidence that the Vice
President's calls had raised hard money, and no evidence that the calls had been madefromareas
of the White House that fall within the statutory prohibition of section 607, the Attorney General
declined to seek the appointment of an independent counsel.
As explained later in this section, the Committee rejects the Attorney General's reading of
section 607 with respect to the scope of "contributions" that fall within its prohibition. Nevertheless,
only a few months after her letter to Senator Hatch, the Committee learned that both of the factual
premises for the Attorney General's declination of the appointment of an independent counsel were
wrong. The Justice Department had apparently assumed these facts without investigating them.
DNC General Counsel Joseph Sandler provided the Committee with critical testimony
regarding the Vice President's phone calls. Sandler's knowledge of these phone calls was
unexpected, and came to the Committee's attention only by piercing the DNC'sfrivolousassertions
of privilege. The Committee initially deposed Sandler on May 15 and May 30, 1997. At both of
these sessions, Sandler refused to answer a number of questions, principally because the DNC was
asserting the attorney-client privilege, or variations of it. In particular, Sandler refused to answer
questions concerning meetings among lawyers for the White House, the DNC, and Clinton/Gore '96,
12
13
Letter from The Honorable Janet Reno to The Honorable Orrin G. Hatch, Apr.
14, 1997, p. 4 (emphasis in original) (Ex. 8).
Id. at p. 5 (quoting 3 Op. Off. Legal Counsel 31 (1979)).
5
�based principally on the DNC's assertion of a "common-interest doctrine" theory of the attorney14
client privilege.
In response to these assertions of privilege, Chairman Thompson issued an Order on June
6, 1997, in which he rejected certain privileges previously asserted by, or on behalf of, Sandler,
including any privileges based on the "common-interest doctrine," among the DNC, the White
15
House, or any other third party.
The ruling thus permitted the Committee to inquire into
conversations that Sandler had with personnel and attorneys within the White House (including the
16
Vice President's office) and the Clinton/Gore Campaign.
At his resumed deposition on August 21, 1997, Sandler identified and discussed a bill for
$24.20 from the "Office of the Vice President," requesting "Reimbursement to U.S. Treasury for
17
DNC telephone expenses." According to an attached check, the DNC paid the bill on the day it was
presented, June 27,1997. Sandler testified that the bill was for long distance fund-raising telephone
14
See, e.g., Deposition of Joseph Sandler, May 15, 1997, pp. 172-99; see also
Deposition of Joseph Sandler, May 30, 1997, pp. 106-08.
Order of Chairman Fred Thompson, June 6,1997 (Ex. 9).
16
The White House must have been uncomfortable with the DNC's claim of
"common interest" between the DNC and the WTiite House, given President
Clinton's public statement, made in an effort to deflect personal responsibility for
the illegalities committed by the DNC in the course of its fund-raising, that such
illegalities were not committed by the Clinton-Gore campaign, but by "the other
campaign." News Conference of President Bill Clinton, Nov. 8, 1997, CNN
Special Event, Transcript # 96110801V06.
17
Deposition of Joseph Sandler, August 21, 1997, pp. 114-119; InvoicefromOffice
ofthe Vice President to DNC, June 27, 1997 (Ex. 10).
�calls that were presumed to have been made by the Vice President from one of his official
18
telephones, but which had not been charged to a Clinton/Gore '96 credit card.
Sandler further testified that the bill and its payment were part of a project that he had worked
on with the Vice President's counsel, Charles Burson and Buzz Waitkin, and with Lyn Utrecht,
counsel to the Clinton/Gore '96 campaign, regarding the telephone calls." Sandler stated that the
members working on the project determined that the Vice President had actually made at least 52
telephone calls soliciting funds, not including calls in which he was not able to reach the person he
intended to solicit.
20
The Vice President potentially raised $795,000 as a result of his telephone
21
calls. Sandler was asked about legal issues that were discussed among the lawyers involved in the
project. He described the focus of those discussions as follows:
Q: Did your conversation with Mr. Burson or Ms.
Utrecht involve issues of legality of the calls?
A: Yes, we did discuss that.
Q: And what was said?
A: There were-well, we talked about the question of
whether the statute that prohibits-assuming even for the sake of
discussion, which I believe is not the opinion of the Office of
the Vice President, that this statute precludes solicitation of
18
Deposition of Joseph Sandler, August 21, 1997, pp. 115-23.
19
See generally id. at pp. 114-27; Deposition of Joseph Sandler, August 22, 1997,
pp. 7-60.
20
Deposition of Joseph Sandler, August 22,1997, p. 37. At his press conference,
the Vice President had indicated that he had raised funds by telephone "on a few
occasions." E.g., Ex. 6, p. 1.
21
Deposition of Joseph Sandler, August 22,1997, p. 58.
7
�people out office [sic] buildings used in performance of an
official duty, even assuming that, there is a question of whether
it applies to the solicitation of money for non-Federal accounts
of political parties, so-called soft money. And we looked at the
kind of money that was raised from various donors and looked at
the kind of money that the Vice President would have likely
thought [he] was raising given what was on the call sheets and
that kind of thing. So we discussed that issue, application of the
statute.
22
On this issue, and as part of the project, Sandler conducted an analysis of the DNC accounts
into which contributions potentially resulting from the Vice President's phone calls had been
23
deposited. In the course of his work, Sandler discovered that some such contributions had been
deposited into the. DNC's federal, or "hard money," accounts. Sandler's deposition testimony
described this discovery as follows:
Q: To your knowledge, has a donor solicited by the Vice
President on an official phone call ever made a subsequent
donation to the DNC where any portion of such donation was
deposited in the DNC's Federal account?
A: Yes.
Q: Tell me about that.
A: Well, subsequent~you mean-those were not
necessarily result-- donations resulting from the Vice President's
22
Deposition of Joseph Sandler, August 21, 1997, pp. 117-18.
23
As evidence of Sandler's work in this regard, the DNC produced a file of his
handwritten notes. File of Joseph Sandler, entitled "VPOTUS Phone Calls" (Ex.
11). These notes list all contributions received by the DNC during the period
from October, 1995 to June, 1996 which were determined to be potentially
attributable to the Vice President's fund-raising telephone calls. These
handwritten notes show that a number of these contributions were deposited into
DNC federal accounts. The DNC's individual federal account is denoted by the
symbol "FOI" in Sandler's notes.
8
�solicitation, but there were donations that were made, you
know, at some point subsequent to the calls. And we prepared a
spread sheet-1 prepared a spread sheet showing the Federal-I
believe I prepared one spread sheet showing just the Federal
donations that followed these phone calls by donors who were
called by donors who called for some~you know, covering ....
some period of time. I don't know how far into '96 we went....
* +*
A: We talked about~I talked about that issue with Mr.
Burson.
Q: In other words, the issue of whether or not the
contribution had properly been deposited in the Federal account
first came up in a conversation between yourself and Mr. Burson?
A: Well, the question of whether in these particular cases,
if the donor had written one check in excess of the Federal amount
and we deposited the~you know, a portion of the check in the
Federal account and a portion in the non-Federal, that the DNC
should have obtained specific-there's a procedure you're
supposed to do obtain specific designation or authorization from
the donor to do so, and that may not have been done in these cases.
And that was checked at some point.
24
Monies allocated to the DNC's federal accounts are, in the parlance of the federal campaign
25
finance laws, "hard" dollars. Thus, under the analysis of Attorney General Reno in her April 14
letter to Senator Hatch, "hard" dollars unquestionably constitute "contributions" within the meaning
of the FECA, thus triggering the application of section 607. The Attorney General, of course, had
refused to initiate a preliminary investigation under the Independent Counsel Act at that time
because of her assumption that the Vice President had raised "soft," as opposed to "hard money."
24
Deposition of Joseph Sandler, August 21, 1997, pp. 123-24; 125-26.
25
Deposition of Joseph Sandler, August 22, 1997, p. 32.
�Sandler's August 21, 1997 disclosure to the Committee that certain contributions presumably
resulting from the Vice President's phone solicitations were deposited into the DNC's "hard money"
account eviscerated that assumption.
When asked about the Vice President's knowledge regarding the accounts into which these
contributions had been deposited, Sandler acknowledged that he had never spoken with the Vice
26
President about the matter, and was not aware whether the Vice President's counsel had done so.
Sandler did volunteer, however, that he and Burson had discussed the matter among themselves and,
based solely on circumstances surrounding the Vice President's telephone calls, had concluded that
27
the Vice President must have thought he was raising "soft money." The principal circumstances
relied on by Burson and Sandler in forming this conclusion were that the amount of money that the
Vice President would typically ask for in these telephone calls was in excess of the $20,000
aggregate annual limit on individual "hard money" contributions imposed by the FECA, and the fact
28
that the Vice President was asking for money to fund the DNC's media campaign.
As part of his hearing testimony before the Committee on September 10, 1997, Sandler
addressed these issues in the following exchange:
Mr. Mattice [Senior Counsel to the Committee]. I think you
will recall, Mr. Sandler, in your deposition, I asked you in the course
of this project whether you and Mr. Burson, the Vice President's counsel,
had ever had any discussions regarding what might have been the Vice
President's state of mind at the time he made these calls with respect to how
26
Id. at pp. 27; 41-42.
27
Id. at pp. 30-32; 41-42.
28
Id.
10
�the monies were to be used or into which accounts they might have been
deposited. Do you recall that?
Mr. J. Sandler. Yes, I do.
Mr. Mattice. Okay. I believe you told me in your deposition
that you personally have never discussed that matter with the Vice
President. Is that accurate?
Mr. J. Sandler. That is correct.
Mr. Mattice. I think you also testified that, to your
knowledge, you do not recall Mr. Burson ever telling you that he
had discussed that issue with the Vice President. Is that accurate?
Mr. J. Sandler. That is accurate."
Mr. Mattice. All right. And I think that you had also told me
your deposition that you and Mr. Burson did discuss this issue, but
the things that you relied on were things such as the amounts of
money that the Vice President was asking for and the fact that at that
point in time, he was asking for money in connection with the
media campaign. Is that accurate?
Mr. J. Sandler. Both that and the fact that the call sheets
given to the Vice President asked him to solicit amounts in excess of
the Federal limits in each of these cases, in which we had determined
that a contribution resulted from a phone call made by the Vice
President and-Mr. Mattice. Okay. I just--oh, I am sorry. Go ahead.
Mr. J. Sandler. And the fact that in each of those cases—and
there were five cases that we had identified, and I know others can
add and subtract and so forth, but~and those five cases that we had
identified, not only did the Vice President's call sheet ask him to
solicit an amount in excess of the Federal limits, in other words, soft
money, but the donor had written a single check for in excess of the
Federal limits.
29
29
Testimony of Joseph Sandler, September 10, 1997, pp. 34-36.
11
�At his testimony before the Committee on September 10 , 1997, Sandler confirmed his
deposition testimony that some of the money raised by the Vice President's telephone calls was
"hard money." Throughout his testimony, Sandler insisted that the Vice President had no knowledge
of the DNC accounts into which contributions resulting from his telephone calls had been deposited.
Sandler even alluded to the Vice President's state of mind in his opening statement, when he said:
Even if the statute did apply in that way, it is limited by its
terms to the solicitation of contributions subject to the Federal
Election Campaign Act, meaning, in the case of party committees,
Federal or so-called hard money. Though we don't think the fact is
relevant because of our view of~my view of the application of the
statute that I just mentioned, all the materials that we have seen
clearly indicate that the Vice President was soliciting non-Federal
money. And that's true even though, because of intemal DNC
procedures of which the Vice President would have no reason to be
aware, the DNC~after the fact and without the Vice President's
knowledge-deposited a small percentage of a portion of those
contributions that he had solicited into our Federal Account.
30
At the September 10, 1997 Committee hearing, Sandler was asked about a series of
memoranda prepared by then-White House Deputy Chief of Staff Harold Ickes that appeared to cast
doubt on whether the Vice President had in fact made his telephone solicitations with the state of
mind that Sandler and the others had attributed to him. These memoranda described the manner in
which funds raised for the DNC would be allocated. These memoranda (which sometimes
transmitted other memoranda prepared by Brad Marshall, Chief Financial Officer of the DNC)
repeatedly highlighted the fact that, as a matter of DNC policy, the first $20,000 of money received
annually by the DNC from an individual donor would be allocated to the DNC's federal (hard
30
Id. at pp. 15-16.
12
�money) accounts, and that only after this allocation was made would any additional monies raised
31
from such individual be allocated to the DNC's non-federal (soft money) accounts.
Most, if not all of these memoranda from Ickes were directed to both the President and the
Vice President. According to Heather Marabetti, then executive assistant to the Vice President, the
Vice President received an overwhelming volume of memoranda, and was not able to read them all.
Some memos received by the Vice President were moved, unread, direcdy to his "out" box. Others,
which the Vice President intended to read, would remain in his "in" box. Marabetti testified that
these memoranda from Ickes were the type of intemal memoranda which "stayed in [the Vice
President's] in-box," and, were, therefore, presumably reviewed by him.
32
Obviously, these
memoranda raise an implication that the Vice President had personal knowledge that a portion of
monies he solicited on behalf of the DNC in his fund-raising telephone calls would be deposited into
the DNC's hard money accounts.
More important, the issue of the Vice President's precise mental state when making the calls
is not necessary in evaluating whether his calls violated section 607. A Federal Election
Commission regulation on this subject states:
Any party committee solicitation that makes reference to a federal
candidate or a federal election shall be presumed to be for the
31
See, e.g, MemorandumfromHarold Ickes to the President and the Vice President,
February 22, 1996 (Ex. 12); Memorandum from Harold Ickes to the President and
the Vice President, June 3, 1996 (Ex. 13); MemorandumfromHarold Ickes to the
President and the Vice President, July 15,1996 (Ex. 14); Memorandum from
Harold Ickes to the President and the Vice President, July 28, 1996 (Ex. 15); see
also Memorandum from Bradley Marshall to Debra DeLee, July 12,1994 (Ex.
16).
32
Deposition of Heather Marabetti, September 3, 1997, pp. 66-67 and see Ex. 14.
13
�purpose of influencing a federal election, and contributions
resulting from that solicitation shall be subject to the prohibitions
and limitations of the Act. This presumption may be rebutted by
demonstrating to the Commission that the funds were solicited with
express notice that they would not be used for federal election
purposes.
33
The effect of this regulation is to create a legal presumption that, in the absence of an explicit
disclaimer to the contrary, contributions solicited for party accounts (such as those maintained by
the DNC) are treated as a matter of law as "hard money" if there is a reference in the solicitation to
a particular campaign or candidate. This presumption arguably renders the subjective state of mind
of the solicitor irrelevant with respect to whether money raised is deposited into "hard" or "soft"
accounts in an analysis of the applicability of a statute such as 18 U.S.C. § 607; so long as the
solicitor refers to a particular candidate or campaign, the resulting contribution is, as a matter of law,
"hard money."
At his deposition testimony on August 22, 1997, Sandler conceded that he and Burson had
not considered the effect for this regulation in their discussions regarding the legality of the Vice
President's telephone calls. He did, however, acknowledge the operative effect for the regulation:
Q: Was this regulation discussed in the course of
conversation you may have had with Mr. Burson or others in
the course of this project or investigation we've been discussing?
A: Not that I recall.
Q: Okay. Tell me your understanding of what subsection of
the Code of Federal Regulations does.
A: If money is solicited in a way that's earmarked for the
election of a Federal candidate in the conception of the-the
33
11 C.F.R. § 102.5(a)(3).
14
�•
framework of the FEC rules, it will be treated as Federal money
unless the donor has advised that it was-or indicated that it would
be deposited in a non-Federal account.
* +*
Q: All right. Give me again-you're the expert at this sort of
thing. Tell me, can you put in a little bit more layman's language
for me your interpretation of this, of what is done by this particular
regulation?
A: Yes. If you solicit funds to a party account without
indicating to the donor into what account it's going to be deposited, or
if the donor doesn't indicate on the check what account to deposit to,
and you say this is going to be used to--we.'re going to use this to elect
Senator Smith, you know, a U.S. Senate race or a U.S. House race, •
Presidential race, the money will be presumed to be Federal unless the
donor's advised different.
Q: Was there ever~in the course of the discussions you may
have had with Mr. Burson or others in the course of this investigation,
was there ever any discussion that the Vice President may have
mentioned to any of these potential donors anything about the accounts
into which their contributions would be deposited?
A: No. I don't think~the Vice President isn't necessarily going
to be familiar with those accounts, which you can tell I don't even know
the codes, and I'm ultimately in charge of it.
34
The Committee concludes that the regulation is most probably applicable to the Vice President's
solicitation calls, as he repeatedly volunteered during in his March 3, 1997 press conference that he
35
was raising funds for "the campaign" or for "our campaign."
The timing of the Committee's discovery that monies raised by the Vice President had been
deposited into hard money accounts is also significant. At his testimony before the Committee on
34
Deposition of Joseph Sandler, August 22, 1997, pp. 44-45.
35
See supra, text accompanying note 7.
15
�
Dublin Core
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Title
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Michael Waldman
Description
An account of the resource
<p>Michael Waldman was Assistant to the President and Director of Speechwriting from 1995-1999. His responsibilities were writing and editing nearly 2,000 speeches, which included four State of the Union speeches and two Inaugural Addresses. From 1993 -1995 he served as Special Assistant to the President for Policy Coordination.</p>
<p>The collection generally consists of copies of speeches and speech drafts, talking points, memoranda, background material, correspondence, reports, handwritten notes, articles, clippings, and presidential schedules. A large volume of this collection was for the State of the Union speeches. Many of the speech drafts are heavily annotated with additions or deletions. There are a lot of articles and clippings in this collection.</p>
<p>Due to the size of this collection it has been divided into two segments. Use links below for access to the individual segments:<br /><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0469-F+Segment+1">Segment One</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0469-F+Segment+2">Segment Two</a></p>
Creator
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Michael Waldman
Office of Speechwriting
Date
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1993-1999
Identifier
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2006-0469-F
Extent
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Segment One contains 1071 folders in 72 boxes.
Segment Two contains 868 folders in 66 boxes.
Provenance
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Clinton Presidential Records: White House Staff and Office Files
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William J. Clinton Presidential Library & Museum
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Adobe Acrobat Document
Text
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Original Format
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paper
Dublin Core
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Thompson Report Volume I [Binder] [2]
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Office of Speechwriting
Michael Waldman
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Box 25
<a href="http://clinton.presidentiallibraries.us/items/show/36404"> Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/7763296">National Archives Catalog Description</a>
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2006-0469-F Segment 2
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White House Staff and Office Files
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William J. Clinton Presidential Library & Museum
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Adobe Acrobat Document
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6/3/2015
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7763296
42-t-7763296-20060469F-Seg2-025-002-2015