Senator Lieberman is the Junior Senator from Connecticut. He serves on the Senate Committee on Governmental Affairs and took part in its investigation into the 1996 campaign finance abuses. He wrote a thought-provoking, detailed assessment of the Committee's investigation. It is a compelling overview and indictment of what Lieberman describes as his "overarching sense emerging from the investigation that our polity has fallen down a long dark hole into a place that is far from the vision and values of those who founded our democracy."

As a lawyer and someone who occasionally makes laws, I became particularly angry about the extent to which the clear intention of the laws regarding campaign finance in America were over and over again circumvented. Some violated, but much more consequentially laws being evaded to a point where the standard of acceptable behavior was what was technically legal even though it was clearly not [what] was intended by the law and frankly, clearly wrong.

This is pretty strong, you know. It was somehow possible for wealthy donors to give hundreds of thousands of dollars to finance campaigns even though the law was clearly intended to limit their contributions to a tiny fraction of those sums.

It was possible for unions and corporations to donate millions to the parties at the candidates' request. It was possible for two presidential nominees to spend much of the fall shaking the donor trees, even though they had pledged under the law, not to fundraise for their campaigns after receiving $62 million each in campaign, in taxpayer funds.

And it was possible for tax-exempt groups to run millions of dollars worth of television ads that clearly endorsed or attacked particular candidates even though they were barred by law from doing so. It sounds to me as if you saw a wholesale subversion of the political process in 1996.

Well, I did. I hadn't thought about this before, but as I hear you read it, it sounds as if it is an indictment. If you could do an indictment for evasion of the law as opposed to violation of the law, that is an indictment.

I mean, the law clearly says that these, and these are mostly post-Watergate reform laws, laws adopted after the last great campaign finance scandal in America. The law says clearly an individual can't give more than $2,000 to a presidential candidate. Well, individuals in 1996, gave hundreds of thousands of dollars through the soft money loophole.

The law says clearly that corporations and unions are not supposed to give anything to campaigns beyond their past limited donations. Corporations and unions gave millions to the presidential campaigns. The law says clearly that if a presidential candidate accepts public financing -- President Clinton and Senator Dole each accepted $62 million of taxpayer money for their campaigns in 1996 -- you're not supposed to raise money after you're nominated.

But what did both of them do? They spent a lot of time in the fall of 1996 raising money. So most of this happened through the soft money loophole, but everybody got caught up in what I describe in my report, my additional views, as the mentality of the Mad Hatter, a tremendous competition, rushing around just to do whatever they could to keep up with each other. Don't worry so much about the clear intention of the law. Do whatever you can get away with.

There's an extraordinarily shocking tale, one of many, in the '96 campaign, at a moment at a fundraiser in Florida. A man named Warren Medoff comes up to President Clinton, as he's going around the room, hands him a card, his card, and according to Medoff, says to the President, "I can raise you $5 million," gives him the card.

The President gives this card to Harold Ickes. Harold Ickes calls this man, Medoff. Medoff says, "I have an associate who's prepared to give up to $5 million, we'll give a million right away and incidentally, my associate would like to receive a tax deduction for this."

Well, you know, stop the movie right here. Number one, an individual's only supposed to give a maximum of $2,000. $1 million, $5 million? Number two, you cannot deduct political contributions. This guy wants to deduct $1 million or $5 million. And what does Harold Ickes do?

Ickes faxes Medoff a list of tax deductible, tax exempt organizations that this individual can contribute to. Well, the only point of this agreement here is Medoff says later in the day, when Ickes apparently took his Mad Hat off, and called up and decided something awful was happening, called up Medoff and said, "Forget about it."

Medoff says Ickes told him to shred the memo. Ickes denies that, but nobody denies that the memo existed and that's the behavior of people, who are not evil people, but who lost their way and ended up doing a lot of bad things in 1996.

So the President's men, in this case Harold Ickes, was actually suggesting to the donor, ways to evade the law?

That certainly was my understanding of what happened. Here's a man clearly saying to the President and then to Ickes, "I want to help your campaign. I want to do it in a tax deductible way."

And then Ickes sends him a memo telling him exactly how to do that, which is an evasion of two clear laws. One, an individual can only give $2,000, two, you can't deduct a political contribution. So at the end of that I said to Harold Ickes, who I know some, who's bright, who's not a law breaker. I said, "Harold, why did you do this?" And he put his head down and said, "We were all like Mad Hatters" and --

And that struck you?

And I'm afraid that's the truth.

What is one the founding principles motivating ideas of our democracy? It is that each of us has equal access to our government. Now we know that that's an ideal that has never been perfectly realized, but when you create a campaign finance system where some people can give a million dollars, then they clearly have a lot more access to people in high office in our government.

And access can be used to influence, and influence can affect policy. To me, the most stark, riveting, disheartening moment in the hearing around this point was Roger Tamraz, and I was questioning him, and I knew he was foreign-born, had become a citizen.

I was interested in how often he voted, and so I asked him, "When Tamraz, did you register to vote?" And he shocked me. He said, "I'm not registered to vote." And there it was. He had made a conclusion. He didn't have to register to vote. I mean this, this right to vote that people have fought for, died for, litigated for, Roger Tamraz didn't have to register to have an opportunity to express his opinion to government.

Because?

Because he put down $300,000 dollars and got right [to] the President and Vice President of the United States.

I mean here's a man, Tamraz, who's got a project to develop oil and bring it from the Caspian Sea area, and he goes to the Energy Department, gets rebuffed. He goes to the National Security Council, he gets rebuffed. People on a policy basis don't agree with what he wants. He steps back and he figures it out.

Matter of fact he said to the Committee, "I'm the kind of the person that if you close the door in my face, I'm going to come through the window." In this case, what he really meant is that he's going to buy his way through the window, put down $300,000, got to a series with the President and Vice President and got to make his pitch for his Caspian region oil pipeline.

I mean when you decide that you've got to raise enormous amounts of money, and you also decide that you're going to raise it in large chunks of so-called soft money, even though that's clearly an evasion of the law, then you are saying to a lot of people, hey you can buy your way in here.

If you're selling access, a lot of people are going to want to buy. And a lot of those people who are going to want to buy are not going to be the kinds of people you'd normally would want to sell to.

In the 1996 campaign unfortunately, a For Sale sign was hung up on the democratic process. And that's why I say that our great democracy ended up in a dark hole, far from the vision and values of the people who founded America.

What about all those White House coffees? The witnesses before your Committee just repeatedly denied that they were fundraisers, but we know better, don't we?

The coffees at the White House were very clearly designed not to violate the letter of the law, but I feel they violated the spirit of the law and they never should have occurred.

So all the troublesome behavior was not illegal?

No, in fact in my opinion, the most scandalous behavior that occurred in the 1996 campaign was legal. There was some illegal behavior, and people should be punished for that illegal behavior as a way to try deter it from happening again, but if we don't change the law, then an awful lot of the worst stuff that happened in 1996, will happen again. It is happening. It still is happening because people will feel that they got away with it.

So we ain't seen nothing yet?

Well, you ain't seen nothing yet. I mean you know the sad fact is during 1997, when all of the media and congressional investigative focus was on abuses of the soft money loophole, the fact is that both political parties were raising almost three times as much soft money as they had raised in the comparable year after the last presidential election.

So I expect that if we don't change the law, the 2000 presidential is going to be the biggest auction in American history, and what's going to be on the block is our government.

The law clearly says that tax-exempt organizations can't have as their major functions, some of them can't do it at all, involvement in partisan activities, and yet we saw in 1996, millions of dollars spent by tax-exempt organizations on television advertisements that any reasonable person would conclude were aimed at electing or defeating a particular candidate for office. That's an evasion of the law.

You said that these were good people and you write in your additional views, otherwise good people gradually lowered the bar of acceptable behavior until they were no longer able to see what they were doing.

Now, do you really believe that they did not see and know what they were doing because the system is not some machine out there running some independently personal choices and individual behavior?

Yeah. I'll tell you what, a whole context, a whole separate existence began to develop in these campaigns. The pursuit was unrelenting need for money to get on television.

An unquenchable thirst you call it.

An unquenchable thirst for money to get on television, to put both campaigns on, to compete with the other side, to not let the other side gain an advantage, and as part of that advised by lawyers, pressed by campaign leaders, people, I think, lost sight of right and wrong.

And they judged their behavior according to what was technically legal or technically illegal. And as a result, I think they lost their way.

It's quite a different question to ask them, in their heart of hearts, do you think you were violating the spirit of the law, do you think you were doing something wrong? I think a lot of them after the campaign is over, probably would say, "Yeah, we were evading the spirit of the law. We were doing some things that we shouldn't have done."

But the tragedy here is, and it happens throughout human experience, in the middle of the pressure of the campaign, I couldn't see that any of them really asked themselves, "Is what we're doing right?" They asked their lawyers, "Is what we're doing technically legal?"

A presidential candidate to accept, to agree to take matching funds must abide by spending limits. I mean that's part of the deal.

That's part of the deal, right.

That is the law. But by using the Democratic National Committee as an end run for millions of dollars spent on television advertising, the Clinton White House at least, the record would suggest, subverted, if not violated the law. Now do you think that that happened without President Clinton's participation?

Well, no, the fact is that the President, according to the public record, was clearly involved with people in the campaign, at the DNC, on his staff as early as the fall of 1995, in charting a course, as the Administration would say and the DNC would say, to get out the message about the accomplishments of the Administration.

In one of those coffees or meetings taped by the White House. The President looks back and says, "We're able to raise a substantial amount of money to go on television in different regional markets around the country, and every time we did, public support of the Administration, the President personally, went up." Do I think the President thought he was breaking the law? No, I really don't. I think he felt that he was advised that this was legal.

But honestly looking back at it and admitting that we have the value of hindsight here, this was a clear evasion of what the laws intended to happen. It happened on the Republican side, too.

This is about some very important moral principles, about equal access to our government, about the trust people have in our government.

Look, there's a very interesting graph that I've seen, that charts increase in spending on campaigns and voter participation in elections, and they go in different directions. As the money spent on campaigns goes up, the voter participation in America goes down. That's not coincidental in my opinion.

And in the way we're running campaigns in America, we're sending out the wrong values message, the wrong moral message. We're basically saying, "Anything goes you can get away with."

I remember how much applause candidate Clinton got in 1992, when he attacked the never-ending streams of money that exchanges hands and ties the hands of public officials, and yet 4 years later, he winds up at the heart of the worst political, financial scandal since Richard Nixon in 1974.

Yeah, well there's a tragedy there. Believe me, the President, I'm sure, didn't want it to come to this point. And here's where I have some empathy, but the empathy ought to lead to trying to change the system.

And I mean let's be real personal. Here's an individual who worked his way up, didn't start out with any advantages, a person of extraordinary merit, worked his way through the education system to Georgetown, to Oxford, to Yale law school, and here he is having achieved a dream, President of the United States, and begins to think that he's not adequately appreciated.

And he may lose, may be embarrassed, may go down in history as a one-term President. And he just decides, well, if this is the way the game is played, I've got to play it this way. And so drives this system further than it should have been driven.

I remember when I decided to run for the U.S. Senate, 1987. I was a challenge candidate against an incumbent and I -- my staff told me that, "You know, you've got to start making calls to raise money." And I've got to tell you that it was a week or two before I made the first call. And I found a million excuses for it.

And finally I was at a meeting here in Washington. One of the Senators then, I think it was Tom Daschle, said to me, "You know, you've got a chance to do this but you're never going to have a chance of being elected a Senator unless you get on the phone or go out there and start raising money because if you don't have money, you're not going to be able to put your message on television. And if your message is not on television, you might as well not be a candidate for the U.S. Senate."

Well, you know, I started to make calls and I suppose fortunately, people generally were responsive. So you keep making them. And I'm embarrassed to tell you that at some point as the campaign went on, I got real good at it. And I got not only so good at it, it began to be a major cause of my mood at the end of a day because you know, I began to realize as the campaign went on and my staff would tell me, "You've got to raise an average of $10,000 dollars a day." Now that's peanuts for a Presidential campaign, but for a challenge candidate for the Senate from a small state like Connecticut that was tough.

When I hit my $10,000 on a day or went over it, I went to sleep with a smile. But when I didn't, I didn't go to sleep so easily.

You spend a lot of time raising money that you ought to spend being a Senator or even being a father, a husband, a friend, a son, having a personal life.

There was another insidious development during the campaign of 1996, the so-called independent expenditures on so-called 'issue ads.' Explain that to me.

Well, it's a complicated business but what has begun to happen over the years, and again it exploded in 1996, is that campaign advertising is not only done by the candidates for office and by the political parties, but by a host of independent groups; political action committees, corporations, labor unions, tax-exempt groups.

Now the law says that no one of these groups can come in and say vote for or against a candidate. But they figured out that they can essentially abuse the First Amendment right that they have to speak to issues by speaking to issues in a way that is clearly advocating the election or defeat of a candidate. And this becomes not just an evasion of the clear intention of the law that tax-exempts, for instance, not participate in partisan activity.

It becomes a way to conceal large donations usually in excess of the limits on individual corporate or labor union contributions to campaigns. So an individual can have given $2,000 to a campaign, as much as he can give to a campaign. An individual can -- could have reached their $25,000 maximum under the law to give to all campaigns in a given year. What do they do?

They give more money to political action committees to run ads, they give money to tax exempt groups in enormous sums to run ads in campaigns. And as a result, they are covertly violating at least a couple of laws.

I think most courts would say, as our Supreme Court has said, that a tax-exempt group has a right to place an advertisement on television about an issue. But what's happened is that more and more of those groups and political groups are wiggling through the glory of the First Amendment to achieve a clearly unintended, and I think effectively illegal result, which is to advocate for or against a candidate.

This kind of spending is unlimited?

This kind of spending is unlimited, and it is -- absolutely right.

And it's beyond accountability?

It's beyond accountability. I mean again, one of the clear intentions of the law is that contributions not only be limited, but that they be public, so that if candidate A is receiving a lot of money from interest group Y, it's on the record. And candidate A's opponent, candidate B, can publicize that in the campaign and let the voters decide whether candidate A was influenced by those contributions from that interest group.

If that interest group or those big individual contributors are giving through an independent group, a tax-exempt group that's putting ads on television, the public never knows where those ads are coming from. And incidentally, all of those independent groups have very cosmetically attractive names: Citizen's Group, American Defense Institute, you know, Vote Now '96.

I mean, but they're all fronts for a clearly partisan purpose.

The majority on the Committee is Republican, and we spent a lot more time looking at the errors and evasions of the Democratic Administration than we did of the Republican Presidential campaign or the Republican leadership of Congress. We spent very little time looking at abuses by independent groups placing ads in campaigns because most of those, more of those tended to be Republican than Democrat, I'm afraid.

It was as if the hand of the Committee got on a hot burner and they pulled it off.

Yeah, it's true. I mean, but I must say something else which is, though I think the Republican majority on the Committee decided that they were approaching a hot burner and wanted to pull their hand off, there were some Democrats who were not so unhappy about seeing the Republican hand pulled off the burner because there were a couple of Democratic hands there as well.

What did you learn about Triad...?

The first thing that Triad did was to be what might be called an investment advisor, a broker. They would provide a service for people, who in the lingo, who had maxed out to a campaign, who had given the maximum they could give to a campaign.

The other activity that Triad got involved in was to set up two tax-exempt entities to accept large and undisclosed contributions, most significantly by one individual, hundreds of thousands of dollars that the record now shows, to run television ads in selected districts on behalf of Republican candidates for Congress. And these ads had an effect, but what was wrong?

Again, the limits on campaign contributions were broken dramatically and the contributors were totally protected, totally private and therefore the voters didn't know where all this was coming from.

So other big money interests, who have already spent all the law allows, can hide additional contributions?

Absolutely. One thing that you can say about soft money, it's disclosed. So even though it breaks the clear intention of the law to limit amounts that people can give, soft money is ultimately disclosed to the public by the national public committees that receive it.

But in the case of these tax-exempt or independent groups, very large contributors give large amounts of money that never is seen by the public, and that's a clear evasion of the law and a distortion of the democracy.

It seems to me that there's been a kind of coup d'état of the democratic process.

That's an interesting way to put it.

That the big donors have actually taken over by purchasing the two parties and the consequence is that the ordinary voter is removed further and further both from knowing and participating.

Yeah, I mean it's interesting. A couple of things, Bill, it's a very provocative point. In the end, the ordinary voter, if he or she is still willing to participate, determine the election. But big money has an enormous influence in contributing to enable the candidates and the parties to go on television, to convince the individual millions of voters about who they should vote for or against.

Big money and big contributors now exercise a disproportionate influence in our political system. I mean in some sense, they have bought a big chunk of the American democracy.

The sad fact is that they had willing sellers here, that the political parties, the candidates, driven by this unquenchable thirst for more money to go on television, have sold. And people have bought.

If we're ever able to close the soft money loophole, we will have achieved something, but then we face another danger which is that campaigns will be run by covert, big money contributors through independent and usually tax-exempt groups running ads on television and the campaigns.

So, there you will really have big money interests taking over American democracy, and in some senses, even beyond what candidates will want, although presumably, at least beyond the immediate control of the candidates, although usually the candidates will at least wink at what is done for them.

But what is new? I mean a hundred years ago, Mark Hannah, who raised millions of dollars for President McKinley in his successful campaign against William Jennings Bryant says, "There are two things most important in politics. The first is money and I can't think of the second." The fact of the matter is, money has always been a part of politics, but what's different today?

Okay, no question money has always been a part of politics, attack ads as we call them now, criticism of candidates back and forth. You know, back to the history, the beginning of the country have always been part of politics. What has changed is the modern telecommunications revolution and the fact that the medium that you and I are appearing over now, which can be used for great good, can also be used for great bad.

And never before have candidates for public office had the capacity to reach so pervasively and intensely into American homes and into the minds and hearts of viewers via television. Television moves voters. I mean we've all been through it. I've seen it myself.

I ran against an incumbent in 1988. Somebody said to me, one of the consultants said, you've got to convince the voters of your state to fire him and hire you. Wow, that sounded pretty rough to me, but in the end you do have to do that. And what's the best way to do that? It works, television. Well, television costs money, at least the way we run it today. And that has driven the unquenchable thirst for cash to get on that medium.

It's made it an arms race in money not missiles.

Absolutely, campaigns today are an arms race in money not missiles because money buys TV time and TV affects the way voters decide to vote more than anything else candidates can do.

And it costs money, and that's what's driving this democracy off its course.

The one purpose of a political party is to keep the other party honest, and yet when both parties are so enthralled to big contributors, something happens to that.

It's hard to do. Look, why are we having such a hard time reforming the current campaign finance system, in spite of the fact that you'd find a hard time here in the Capitol finding a member who would really in a private conversation tell you that what's going on now is right?

It's because it's the status quo. Because the people who are here, as much as they complain about the current system, a lot of the times sincerely complain about it, are surviving it and so it's hard to change.

Can we encourage people in television to save us from temptation, if you will, and provide free air time or equal air time, to do something to go at what I would call the demand side of this problem? The demand for money is being fueled by the felt need to be on television.

If you begin to provide this free, then there's going to be less of a drive to raise money, and less of a likelihood that laws will be evaded and big money will have unequal access to our government.

Most of the independent money that is raised to go on television is used not to discuss issues or describe why I'm going to be a better office holder, but to knock down the other guy. And it's done powerfully over television and that has had an effect on the public and will continue to have an effect unless we change it on our children and our grandchildren.

And I use this homely analogy. If Wal-Mart used its entire advertising budget to attack JCPenney, and JCPenney used its entire advertising budget to attack Walmart, the result would be that fewer people would shop at Wal-Mart and JCPenney. And that's exactly what's happening to our political system. Fewer people are voting. Fewer people have trust in the people in government, and if we let that continue, this is not going to be, no matter how wealthy we are, the kind of country we want our children and grandchildren to grow up in.

It's certainly not the kind of country the framers of the Constitution and the writers of the Declaration of Independence envisioned.