Campaign Finance Reform and the Iran-Contra Hearings

By Dennis J. Wamsted

Iran-Contra Hearings Begin

After months of private consultations and investigations regarding the Iran-contra affair, public hearings were convened May 5 by the House and Senate select committees chaired by Senator Daniel Inouye (D-HI) and Representative Lee Hamilton (D-IN).

In his opening statement, Senator Inouye said: "The story is one...of covert foreign policy...filled with inconsistencies and often unexplainable conduct." Similarly, Representative Hamilton said something had gone "seriously wrong" in the conduct of US foreign policy. The hearings are needed, Hamilton said, to bring this "something" into the public realm, to "examine it, learn from it and, if possible, correct it."

One "something" that is not expected to be seriously probed during the committees' hearings is the role Israel played in what Inouye called this "sad and sordid" affair. This despite the fact that Israeli officials suggested the Iran plan at the outset, played the key role in funneling US arms to Iran at its beginning, and time and again re-initiated the ill-fated arms-for-hostages scheme after US officials recommended that it be ended. In late April, Representative Hamilton admitted as much, saying "we haven't received any response from the Israelis" to questions submitted in mid-February by the committees on the roles of the Israeli government and private Israeli citizens in the Iran-contra affair. The congressional committees are presently negotiating with the Israeli Embassy in Washington for the release of a financial chronology prepared by Israel and delivered to its Embassy at the end of April. While lawyers for the committees have been allowed to read the document at the Israeli Embassy, Israel is insisting that its citizens be granted immunity from prosecution before the document is released. The Washington Post reported that Judge Abraham Sofaer, the State Department's legal counsel, is trying to broker an agreement between the Embassy and the committees.

Senator Inouye's leading role in the congressional investigation helps account for the benign response to Israel's less-than-complete cooperation.

Campaign finance reform is desperately needed to erase the impression that the highest electoral offices in the US government are on the auction block. The proposed reforms could also reduce the influence of the 80-plus well-financed pro-Israel political action committees that have sprung up in the last six years, thus making for a more balanced US Middle East policy.

Inouye, one of Israel's staunchest supporters, has handled most of the committee's affairs with the Israelis. He has also successfully managed to shift the focus away from Israel. Interestingly, although he faced virtually no opposition in his 1986 re-election campaign, Inouye accepted almost $50,000 in contributions from out-of-state pro-Israel political action committees (PACs). The Hawaii senator has also received approximately $4,000 per year since 1980 in honoraria for speaking before a variety of pro-Israel groups around the country.

Inouye is obviously not alone in his acceptance of pro-Israel PAC money. In fact, pro-Israel PACs contributed millions to congressional campaigns in the 1986 elections. For example, just six Senate aspirants received a combined total of more than $900,000 in contributions, an average of more than $150,000 per candidate. Five of these six—Thomas Daschle (D-SD), Alan Cranston (D-CA), Harry Reid (D-NV), Arlen Specter (R-PA), and Bob Kasten (R-WI)—were elected. In fact, concern about such expenditures by special interest groups has initiated a serious effort in the current Congress to reform US campaign finance laws.

The Push for Campaign Finance Reform

One of the leaders of the current reform push is Senator David Boren (D-OK), current chairman of the Senate Select Committee on Intelligence and a key member of the Iran-Contra panel. Boren and Senate Majority Leader Robert Byrd (D-WV) are pushing for adoption of a bill that would result in partial public financing of Senate general elections, establish voluntary campaign spending limits, and limit the amount of PAC money that a candidate could accept in a given election cycle. The bill, S.2, was approved in late April by a vote of 8-3 by the Senate Rules Committee, which is chaired by Senator Wendell Ford (D-KY), a strong supporter of campaign finance reform. Senate aides said that the proposed bill may be brought up for full Senate consideration as early as June.

In a recent speech before the National Conference of State Legislatures, Sen. Boren said that campaign finance reform is desperately needed to erase the impression that the highest electoral offices of the US government are on the auction block. Boren told the legislators that 194 of the representatives and senators elected in 1986 received more than 50 percent of their total campaign monies from PACs. This is destroying the concept of "grass roots democracy," according to the Oklahoma senator. Perhaps worst of all, in Boren's view, fully 82 percent of all the PAC money contributed in 1986 went to incumbents seeking re-election.

S.2 seeks to "restore some balance" to the system, Boren says. To do this, candidates will be encouraged to abide by a voluntary system of spending limits. (The Supreme Court has previously ruled that mandatory limits are an illegal restriction of the freedom of speech.) The "voluntary" limits devised by Boren and his supporters include a string of disincentives fro those reluctant to play by the new rules and, in truth, will give candidates virtually no choice but to "volunteer." As to specifics, the bill will establish a spending cap, which will vary from state to state depending on population, and force candidates to raise 20 percent of that cap from individual contributions totaling less than $250 each in order to qualify for federal support. Spending in primaries would be limited to 60 percent of the general election total under Boren's proposal. Perhaps most important, allowable PAC contributions would be capped at a maximum of 20 percent of the overall spending limit, reinforcing the importance of individual, in-state contributors.

Even though the bill has 47 co-sponsors, Boren says it will take a concerted effort to get the legislation enacted, and once on the Senate floor a filibuster, which will take 60 votes to override, is a virtual certainty. Despite this, he and his supporters are optimistic. "The full Senate will act quickly and positively on this legislation," Senator Ford predicts.

The Senate's push for campaign finance reform will influence how seriously the issue is considered in the House. The House Administration Committee's subcommittee on elections, which has responsibility for this issue, is chaired by Representative Al Swift (D-WA), who plans to hold a series of hearings this year on campaign finance reform later this year. A number of bills have already been introduced, but it is likely that a bill similar to Boren's, taking into account the particular concerns of House members, will be introduced by Swift shortly. Although there is no way to predict the outcome, there is a "much greater" chance that some type of reform measure will be enacted during this Congress, according to a subcommittee aide.

Campaign Finance Reform and Pro-Israel PACs

Ironically, the pro-Israel PACs' success during last year's elections may have paved the way for this year's reform push. Pro-Israel PACs played a pivotal role in the election of eight Democratic senators in 1986 who won with 53 percent or less of the popular vote. As a result, the Senate is now controlled by Democrats, who chose West Virginia's Robert Byrd as Senate Majority Leader. This change was central to the current push for reform. Although Senator Boren deserves praise for his public efforts, the "driving force" behind the current attempt to rein in spending and PAC contributions in Senator Byrd, one congressional staffer said. Coincidentally, the real explosion in PAC spending occurred during the 1982-1986 elections, when the Democrats were in a minority in the Senate.

Senate aides concede that many hurdles still must be overcome, but they point out that this is the first time in 15 years that any type of campaign finance reform bill has been approved by the Senate Rules Committee and sent on for consideration by the entire chamber.

If such reform is ultimately adopted, it could reduce the influence of the 80-plus well-financed pro-Israel PACs that have sprung up in the past six years. Mindful of the electoral defeats suffered by Senator Charles Percy (R-IL), past chairman of the Senate Foreign Relations Committee, and Representative Paul Findley, formerly the ranking minority member of the House Foreign Affairs subcommittee on Europe and the Middle East, few in Congress now dare to speak out in favor of a balanced US policy in the Middle East. Both Percy and Findley, who did argue in favor of such a balanced approach, were targeted by pro-Israel PACs. Campaign finance reform, therefore, might not only "restore some balance" to the US electoral process, it could also lead to a more evenhanded US approach to Middle Eastern affairs.

Dennis J. Wamsted is a free-lance writer specializing in the US Congress and Middle Eastern Affairs.