The Buying of the President 2000
Albert Gore, Jr.
“We raised him for it.”
- Senator Albert Gore, Sr., when asked in 1992 if his son was presidential material
On September 7, 1995, Vice President Albert Gore, Jr., stood on the White House lawn and talked in sweeping terms about ending the era of big government. He touted a list of recommendations formulated by the National Performance Review, an initiative Gore directed, that, he claimed, streamlined the federal bureaucracy, cut unnecessary waste, and helped make the government “work better and cost less.” Gore said that his report, delivered to President Clinton that day, would continue the drive to “reinvent government.”
Gore did not mention that his recommendations to the President included a plan to give oil companies access to thousands of acres of oil-rich, publicly owned land that the U.S. Navy has held as emergency reserves since 1912. Ever since the federal government earmarked the reserves for military emergencies, the oil industry had tried and failed to pry them away from the Navy.
In 1922 a couple of oil men — Edward L. Doheny and Harry Sinclair — bribed Albert Fall, the secretary of the interior in the Harding administration, for secret leases to drill on two of the fields, the Teapot Dome field just outside of Casper, Wyoming, and the Elk Hills field in Bakersfield, California. Doheny and his Pan-American Petroleum and Transport Company (later Atlantic Richfield Company, or ARCO), paid $300,000 to Fall in exchange for the rights. When the bribes were uncovered, the ensuing Teapot Dome scandal forced the resignations of Fall (who later went to prison) and Edward Denby, the secretary of the Navy.
In 1973, during the Arab oil embargo, the Nixon administration tried to lease Elk Hills to boost domestic oil production. In 1984, 1986, and 1987, the Reagan administration proposed selling Elk Hills for a lump sum payment of $1.5 billion that would go toward reducing the federal budget deficit. Each time, Congress wisely blocked the sale of Elk Hills.
But where Fall, Nixon, and Reagan had failed, Gore succeeded. Despite the history of the naval petroleum reserves, despite the royalty revenues that the field continued to generate, Gore recommended that the government put Elk Hills on the auction block. President Clinton took Gore’s advice and approved a deal to let oil companies buy some of the reserves. The White House then pushed to have language authorizing the sales inserted in the 1996 defense authorization bill, which Congress ultimately approved. Oil companies bid on the field and, finally, on October 6, 1997, the Energy Department announced that the government would sell its interest in the 47,000-acre Elk Hills reserve to Occidental Petroleum Corporation for $3.65 billion. It was the largest privatization of federal property in U.S. history, one that tripled Occidental’s U.S. oil reserves overnight. During the months after the sale, Occidental tripled the amount of natural gas extracted from the field.
Although the Energy Department was required to assess the likely environmental consequences of the proposed sale, it didn’t. Instead it hired a private company, ICF Kaiser International, Inc., to complete the assessment. The general chairman of Gore’s presidential campaign, Tony Coelho, sat on the board of directors.
Just hours after the announcement of the Elk Hills sale, Gore stood across town on the campus of Georgetown University and delivered a speech to the White House Conference on Climate Change on the “terrifying prospect” of global warming, a problem he blamed on the unchecked use of fossil fuels such as oil. Even as Occidental was moving forward with plans to boost oil production at Elk Hills, Gore told his audience: “If we ignore the scientific warnings and continue stubbornly on our current course, we’d better begin to prepare what we would like to say to our children and grandchildren, because if they encounter the terrible consequences the scientific community is saying now come as a result of global climate disruption, and then look back at the evidence which was clearly laid out for us in our generation, they might fairly ask, ‘If you knew all that, why didn’t you do something about it?’”
If there is one oil company that Gore might ask “our children and grandchildren” to forgive, it is Occidental Petroleum. The company has been a steady supplier of campaign funds to Gore and to the Democratic Party, though its relationship with Gore goes far deeper. Armand Hammer, who built Occidental Petroleum into the behemoth it is today and who’s been described as “the Godfather of American corporate corruption,” liked to say that he had Gore’s father, Senator Albert Gore, Sr., “in my back pocket.” When the elder Gore left the Senate in 1970, Hammer gave him a $500,000-a-year job as the chairman of Island Coal Creek Company, an Occidental subsidiary, and a seat on Occidental’s board of directors. By 1992, Gore owned Occidental stock valued at $680,000.
Al Gore, Jr., is known as an earnest politician who takes an intellectual interest in arcane areas of legislative policy, including the “reinvention of government,” telecommunications systems, suburban planning, and the Internet. Over the course of his career, Gore has bolstered his Boy Scout image by publicly identifying himself with various hot-button issues. In a 1985 Senate hearing he attacked record-company executives, music retailers, and “heavy metal” bands after his wife, Tipper, and a group she headed called for warning labels on record albums for violent and pornographic lyrics. In an emotional speech to the 1996 Democratic National Convention in Chicago, he related how his sister Nancy, who started smoking when she was 13, died of lung cancer in 1984, and how her death — and the prospect that others like her would die from smoking-related diseases — led him to put his “heart and soul into the cause of protecting our children from the dangers of smoking.” And for most of his career, Gore has warned of the dangers that modem civilization poses to the environment. His 1992 book argued that an environmental holocaust is inevitable unless society changes its ways.
But Gore is hardly a Boy Scout, and long before he became Clinton’s running mate, he proved that he was willing to put aside conscience, or at least political conviction, to raise money for his campaigns. In October 1987, for example, Michael “Mickey” Kantor, the Los Angeles lobbyist, fundraiser, and later chairman of the 1992 Clinton-Gore campaign, arranged a private meeting for Gore and his wife in the executive dining room of MCA, Inc., with a group of entertainment industry bigwigs. At the meeting, which was described as a “clear the air” session, Tipper Gore averred that the Senate hearings attacking the music industry were “a mistake” that “sent the wrong message.” In February 1988, four years after his sister’s death from lung cancer, Gore, then a presidential candidate, hollered to an audience in Greenville, North Carolina: “Throughout most of my life, I raised tobacco. I want you to know that with my own hands, all of my life, I put it in the plant beds and transferred it. I’ve hoed it, I’ve dug in it, I’ve sprayed it, I’ve chopped it, I’ve shredded it, spiked it, put it in, the barn, and stripped it and sold it.” Gore proclaimed his support that day for federal tobacco subsidies, but he didn’t holler that he also was happy to take money from the tobacco industry. His sister’s death notwithstanding, since 1985 Gore has collected at least $65,490 in contributions from tobacco interests. As for the environment, Gore was happy to recommend selling the Elk Hills field, which Occidental quickly snapped up.
Nonetheless, Gore somehow managed to maintain, as a reporter put it at a press conference in 1997, an “impregnable reputation for being above the fray and for being ethically someone who really hasn’t been questioned” about his fundraising practices. But all that ended with the disclosure in March 1997 that, from his office in the West Wing of the White House, Gore had telephoned 56 well-heeled donors in 1995 and 1996, hitting them up for soft-money contributions of up to $100,000 apiece — in seeming violation of both the Pendleton Act and the Hatch Act, which prohibit soliciting contributions from government buildings. To raise money for his reelection in 1996, he opened up the residence at the Naval Observatory, the taxpayer-supported home of the vice president, to wealthy contributors. He and Tipper hosted White House coffees. He attended a fundraising event at a Buddhist temple that turned out to be implicated in violations of federal election laws. And on March 3, 1997, Gore held a press conference to announce that he did not regret a thing. “I’m very proud that I was able to be effective in helping to reelect President Clinton,” he said. “And I was very proud that I was able to also, as part of that effort, help raise campaign funds.”
As for whether he had broken any laws, Gore insisted with practiced assurance some seven times in the course of the press conference that “no controlling legal authority” applied to his activities. “As a matter of law,” Gore explained at one point, “there is no — according to my counsel — there is no controlling legal authority, no case ever brought, ever decided, that says that this is a violation of the law.” In other words, in the 114 years since Congress passed the first law that barred federal officials from soliciting contributions on government property, no person had ever been caught and tried for doing it.
Attorney General Janet Reno sympathetically split legal hairs in the vice president’s favor. She ruled that since Gore wasn’t raising hard money (contributions that are regulated under the Federal Election Campaign Act) but rather soft money (contributions that aren’t regulated), he was in the clear. It was fine for the vice president to call from a government building and ask a fat cat for $100,000, but he would have been in trouble had he asked merely for $1,000. Gore’s own staff had come up with various other subterfuges to justify his calls. He typically dialed for long distance dollars with a telephone calling card supplied by Clinton/Gore ‘96 (although in August 1997 the DNC quietly sent the Treasury Department a check for $24.20 to reimburse it for the costs of some of Gore’s fundraising calls), and as vice president he was exempt from the provisions of the Hatch Act (although in 1995, then-White House Counsel Abner Mikva had sent a memo to all Clinton administration officials in which he argued exactly the opposite).
Gore’s eager participation in the 1996 no-holds-barred dash for cash — he was even dubbed “solicitor-in-chief” by staffers at the DNC — was part of a pattern stretching over his 22-year career in Washington. In 1987 he was the presidential candidate of choice of Walter Mondale’s moneymen, and he agreed to run for the White House only after they wooed him with the promise of millions in funds. Within 24 hours of being named Clinton’s running mate in 1992, Gore proved his worth to the ticket by raising $1 million in soft money for the campaign. And in advance of the 2000 presidential election, Gore has constructed one of the most formidable fundraising machines in the history of presidential politics.
As his father said, he was raised for it.
Gore spent most of his childhood on the top floor of the Fairfax Hotel in Washington, D.C., which was owned by relatives and in later years would bear the name Ritz-Carlton. When Gore was born, Albert Gore, Sr., had already served 10 years as a U.S. Representative from Tennessee. In 1952, when young Gore was four years old, his father won a seat in the U.S. Senate. The young Gore spent his childhood in Washington admiringly watching his father go about the business of being a member of Congress. From early on, Gore wanted to follow in his father’s footsteps and make a career out of politics. “He was my hero,” Gore said of his father in a 1986 interview.
In high school at the exclusive St. Albans School for Boys, Gore’s classmates tagged him with the nickname “Ozymandias,” a reference to the poem by Percy Bysshe Shelley about a ruler who touts his own power, declaring, “Look on my works, ye Mighty, and despair!” It was apparent even then to Gore’s schoolmates that he was headed for a career in politics.
After four years at Harvard (during which time he continued to date his prep-school girlfriend and future wife, Mary Elizabeth “Tipper” Aitcheson), Gore found himself in danger of being drafted into military service. He opposed the Vietnam War, but his father was facing a difficult reelection campaign in Tennessee, where support for U.S. involvement in Indochina ran strong. In what Gore later called “one of the most difficult decisions that I’ve ever had to make,” he opted to enlist. Newly married to Tipper, he received his papers in September 1970, just in time to make campaign appearances with his father in his Army uniform. He arrived in Saigon on December 26, and served seven months as a reporter for Army publications. Although Gore never saw combat there, he wrote a friend that he would pursue divinity school in pan to “atone” for what he had witnessed in Vietnam.
In May 1971, Gore returned to Nashville, Tennessee, where he found a job as a reporter for The Tennessean. While working at the newspaper, he enrolled in Divinity School at Vanderbilt University. Three years later, in 1974, he took an active step toward a career in politics by transferring to law school at Vanderbilt, much to the delight of his father. Gore Sr. disapproved of his son’s decision to work at The Tennessean, having always encouraged him to attend law school as preparation for a political career. During Gore’s second year of law school, he found himself with an opportunity to run for Congress, and he jumped at it.
In February 1976, Democrat Joe Evins announced his intention to retire from the House of Representatives. Over the course of two days, Gore withdrew from law school, resigned from The Tennessean, trimmed his hair, put on a suit, and announced his candidacy. “On, like, Friday afternoon Al was — his hair was a little bit long, and he was working away as a reporter,” a friend of Gore’s who was working at the newspaper later told a reporter. “But on Monday morning he had a navy-blue suit and a haircut, and was announcing for Congress.”
Once Gore came back to Washington as a U.S. Representative in 1977, he proved far more politically cautious and calculating than his father. Pauline Gore, in a 1988 interview, summed up her son’s approach to politics in this way: “Al by nature is more of a pragmatist than his father. As am I. I tried to persuade Albert [Sr.] not to butt at a stone wall just for the sheer joy of butting.”
Pragmatist or not, the son often pays homage to his father, a fiery-tempered populist on the campaign trail in his home state who occasionally played the fiddle at political rallies. The elder Gore was not afraid to speak his mind; at a time when most Tennesseans supported U.S. military involvement in Vietnam, he opposed it. At a memorial service for Gore Sr., who died on December 5, 1998, his son said simply, “My father was the greatest man I ever knew in my life.” In his own campaign appearances, Al Gore frequently invokes the career of his father. In an August 3, 1999, speech to the Progressive National Baptist Convention, a meeting of black religious activists, Gore stressed his father’s crusade against bigotry and his three-decade-long commitment to civil rights. “He supported the Voting Rights Act in 1965 and lost his next reelection,” Gore said. “But his conscience won and he taught me that [that] was worth more than any election.”
In truth, however, Gore’s father had something of a mixed record on civil rights. In 1964, a reelection year for the senator from Tennessee, he voted against the Civil Rights Act, a far-reaching piece of legislation that outlawed racial discrimination in schools, in workplaces, and in neighborhoods. Recalling the vote in his 1970 memoir, The Eye of the Storm: A People’s Politics for the Seventies, the elder Gore explained his opposition to the legislation. “Because of this arbitrary grant of power and because I doubted the justice and rationality of, for example, denying federal funds to a hospital filled with sick people because the waiting rooms did not comply with undefined guidelines, I opposed the bill,” he wrote. “Now I acknowledge that many people disagreed and will disagree with this point of view. I concede them their point of view but I feel very deeply that I was right.” While Gore’s father opposed opening the doors of hospital waiting rooms to African-Americans, he was passionately committed to providing access to the corridors of power to wealthy white industrialists like Armand Hammer.
For part of his career, Albert Gore, Sr., received two paychecks: one from the taxpayers, and another from Armand Hammer. Hammer, who raised prize bulls, met the elder Gore at a Tennessee cattle auction in the 1940s. He put Gore, who was then a member of the House, on the payroll of his New Jersey cattle business. Thus began a cozy relationship between the two men that would last until Hammer’s death.
Hammer personified the worst excesses of both capitalism and Communism. In his biography of Hammer (Dossier: The Secret History of Armand Hammer), Edward Jay Epstein notes that Hammer built a pencil factory outside Moscow in 1926 and returned to the United States soon after that to launder funds for the Communist Party. In the 1930s, Hammer marketed something he called the “Romanoff Treasure,” a collection of fake Russian art that he passed off as genuine. Much of the proceeds of the sales went to Joseph Stalin’s government. Hammer helped recruit Soviet spies and position them in the U.S. government. At one time he even had a contract to train dogs for the Soviet police.
FBI Director J. Edgar Hoover wanted to prosecute Hammer for his activities on behalf of the Soviet government. But Hammer had friends in Congress whom Hoover believed would attempt to protect him from prosecution; among them was Gore, who took to the floor of the Senate once to defend Hammer against allegations of bribery (later proved to be true) in obtaining government contracts.
Gore’s job as a senator was even more useful to Hammer the capitalist. In January 1961 the most sought-after ticket in Washington was to John F. Kennedy’s inaugural ball; Gore made sure that Hammer got one. A few months later Gore successfully lobbied the Commerce Department to back Hammer’s visit to the Soviet Union. The Kennedy administration had banned the importation of Soviet crabmeat on the ground that it was produced with slave labor; Hammer reported that he had found no evidence to support the ban, which was soon lifted. Gore even suggested to President Kennedy that Hammer, whom the FBI had long known was an agent for the Soviet Union, act as an envoy to Nikita Khrushchev should any crisis erupt between the two superpowers.
In April 1968, Senator Gore stood by Hammer’s side when the industrialist officially opened his Libyan oil fields. Occidental was not a player in world crude-oil markets until Hammer bribed King Idris and some of his officials to gain a concession to the huge reserves there. Two years after Gore left the Senate, Hammer placed him on Occidental’s board of directors, where he earned a much higher salary than he had as a U.S. senator.
By the time the younger Gore was elected to the U.S. House of Representatives, the Gore relationship with Hammer had already begun to transfer from father to son. In the 1960s, Gore informed Hammer that zinc ore had been discovered near the Gore farm in Smith County, Tennessee. Hammer, who owned Occidental Minerals (a subsidiary of Occidental Petroleum), bought the land for $160,000, twice the only other offer. But after buying the land, Hammer made a strange decision — at least from a business standpoint. Rather than mine the zinc-rich land, he offered instead to let Gore buy it from him. Then, once ownership transferred to Gore, Occidental starting paying Gore $20,000 per year for the mineral rights to mine it. After the first payment, Gore Sr. sold the land to his son for $140,000. Gore has received a $20,000 check in the mail almost every year since.
Perhaps even more astounding than Hammer’s decision to sell the land and pay royalties is that Occidental never actually mined the land. In 1985, Gore began leasing the land to Union Zinc, Inc., a competitor of Occidental’s. Gore still receives $20,000 a year in royalties. In all, the Hammer-engineered sweetheart deal has put hundreds of thousands of dollars in profits in Gore’s pocket.
The relationship between Hammer and Al Gore, Jr., continued. Gore and his wife once caught a ride across the Atlantic Ocean on Hammer’s private jet; they hosted Hammer at Reagan’s 1984 inauguration and President Bush’s in 1988; and they attended Hammer’s 90th birthday extravaganza in Washington on May 21, 1988. When Hammer came to Washington for business, he and Gore frequently lunched together in the company of Occidental’s lobbyists.
In return, Hammer and members of his family bent over backwards to get money into Gore’s campaigns.
Gore recognized that his relationship with Hammer, who died in 1990, and his company did not look good. In 1992, before President Clinton settled on him as his running mate, Gore’s father wrote a memo for Clinton on his ties to Occidental to prepare him for possible questions about it. After the election, however, Gore resumed his old relationship with the company and its new chairman, Ray Irani.
Occidental, for example, loaned $100,000 to the Presidential Inaugural Committee to help pay for the ceremony and the celebrations surrounding it. And Gore used his connections to bring in money from Occidental for the Clinton-Gore reelection campaign. According to a memo from White House Deputy Chief of Staff Harold Ickes, Occidental gave $50,000 in response to one of Gore’s telephone calls (this one from the DNC’s offices, not the White House). Indeed, since Gore became part of the Democratic ticket in the summer of 1992, Occidental has given more than $470,000 in soft money to various Democratic committees and causes.
Irani may lack Hammer’s high profile — the old chairman traded quips with Johnny Carson on The Tonight Show — but he has been as cozy as his predecessor was with occupants of the White House. Two days after he slept in the Lincoln Bedroom of the White House, Irani’s company dropped $100,000 on the DNC. He was also one of 130 guests at Clinton’s second official state dinner, on September 27, 1994, where Russian President Boris Yeltsin and his wife were the guests of honor. Occidental had some interest in Russian oil; in the spring of 1994, Irani had traveled with Commerce Secretary Ronald Brown on a trade mission to Russia.
In 1993, Vice President Gore boarded Air Force Two and flew to Moscow for meetings with Russian Prime Minister Victor Chernomyrdin about the vitally important task of protecting nuclear weapons and nuclear material in the newly decentralized former Soviet Union. It was a natural mission for Gore; during his tenure in the Senate, he had become something of an expert in arms control agreements and, thanks to the patronage from Hammer, had already met with Anatoly Dobrynin, Moscow’s longtime ambassador to Washington.
Many defense experts consider Russia’s nuclear arsenal to pose the greatest immediate threat to U.S. security, of even greater concern than China’s acquisition of U.S. nuclear secrets. The Chinese will no doubt develop sophisticated warheads and the missiles to launch them over the next decade or two; the Russians already have them. The fear of loose nukes grew as economic conditions in the old Soviet republics deteriorated in the early 1990s. Gore’s mission was to reach an agreement with Russia on a way to manage all those weapons in a post-Cold War world.
Gore and Chernomyrdin discussed a 20-year, $12 billion deal — signed just months earlier — under which Russia would process its weapons-grade uranium into lower grade, reactor-friendly uranium and ship it to the United States. The U.S. Enrichment Corporation (then a government-owned corporation) would buy this uranium and sell it to nuclear power plants in the United States. The cash-starved Russian government would get much-needed dollars to pay its nuclear scientists, those scientists would not be tempted to offer their services around the world, and nuclear material would be under the protection of the United States.
It looked good on paper, but it didn’t work out that way. In 1996, Congress passed a bill to privatize the U.S. Enrichment Corporation (USEC), a move that threatened the Gore-Chernomyrdin agreement, though one that in fact would ultimately benefit Gore.
Some leading foreign-policy experts warned that privatization threatened the deal. Thomas Neff, a senior researcher for the Center for International Studies at the Massachusetts Institute of Technology, who conceived of the uranium agreement, told the Center for Public Integrity that he raised such questions as he briefed members of the vice president’s staff throughout 1997. A privatized, profit-seeking USEC would pay Russia far less cash for its uranium than the amount Gore and Chernomyrdin had originally agreed on. Although Gore was in a perfect position to lobby against the privatization scheme, he didn’t. Instead, the Clinton-Gore administration wholeheartedly supported privatization of USEC as part of its efforts to “reinvent government.”
USEC’s board of directors, led by William Rainer, a large donor to the Presidential Inaugural Committee in 1993, had decided to consider two options: Sell the company to a behemoth like Lockheed Martin Corporation, or go it alone with an initial public offering. Rainer and the board chose the latter course. In 1998 the U.S. government got $1.9 billion from the sale of USEC to private investors. Clinton rewarded Rainer for presiding over USEC’s privatization by nominating him to serve as the chairman of the Commodities Futures Trading Commission. At his Senate confirmation hearings, Rainer said, “I thought it was the right decision, and one year later, I look at the decision and I still think it was the right decision.”
The decision was certainly right for some of Gore’s biggest benefactors, which quickly cashed in on what turned out to be a $75 million bonanza. Wall Street firms such as Morgan Stanley, Dean Witter & Company; Merrill Lynch & Company, Inc.; and Goldman Sachs & Company, Gore’s No. 3 career patron, collectively raked in at least $42 million in underwriting fees. Well-connected law firms, among them Skadden, Arps, Slate, Meagher & Flom and Patton, Boggs earned nearly $11 million for their part in privatizing the company. USEC retained J.P. Morgan & Company, Inc., as its adviser in the deal; J.P. Morgan, in turn, hired Greg Simon, Gore’s domestic policy adviser, for a fee of $10,000 a month to help it select the new, privatized company’s directors.
As Neff and other experts had predicted, however, the deal soon began to unravel. Later in 1998 USEC announced that it had received shipments of uranium from the U.S. Department of Energy. The sudden glut caused the worldwide price of uranium to plummet, and the Russians suddenly stood to receive less money than they had been promised. Yeltsin’s government cried foul and threatened to sell its nuclear material to other countries, including Iran. The White House scrambled to come up with the money the Russians demanded, and managed to quietly slip an extra $325 million for the Russians — a taxpayer-financed bailout — into an omnibus appropriations bill before Congress.
Neff, the architect of the plan to ship Russia’s weapons-grade uranium to USEC for reprocessing, estimates that it will cost taxpayers $140 million a year for 15 years to continue purchasing the Russian nuclear material, for a total cost of $2.1 billion — or $200 million more than the sale of USEC brought in.
Gore’s “reinvention” of USEC made a lot of money for some of his most reliable political patrons. It also endangered nuclear arms control and left in private hands the management of facilities that are contaminated with deadly substances.
On June 16, 1999, when he officially announced in Carthage, Tennessee, that he was a candidate for president, Gore promised to “bring revolutionary improvement” to the nation’s public schools. No doubt he had in mind one of his hot-button issues, which he never tires of hyping: connecting every school in the United States to the Internet. The campaign’s website spells out Gore’s vision for pushing schools into the world of high technology, including promises that “every classroom and library [will be] wired to the Information Superhighway” and of “new educational software for all schools.” In the few years since Gore took office the Internet has grown into a significant sector of the U.S. economy. Gore no doubt understood what that could mean for his presidential campaign: a mother lode of money.
Since early 1997, Gore has been holding monthly meetings with a group of executives from Silicon Valley. They reportedly talk about the “high-tech” issues of the day; Gore feeds his interest in the Internet, which he once notoriously claimed he took the lead in creating, and the executives get to advise the vice president on matters that interest them.
Both Gore and the executives have said that the meetings are not about fundraising. But Silicon Valley is home to the youngest fat cats in America. The “Gore-tech” group, as it has been called by Gore’s staff, consists of about 15 core visitors (at least nine of whom have made political contributions to Gore), and others from time to time. The “regulars” include Marc Andreessen, a founder of Netscape Communications, Inc., and later the chief technology officer at America Online, Inc., which acquired Netscape in March 1999; Scott Cook, the chairman of Intuit, Inc.; Charles Geschke, the president of Adobe Systems, Inc.; Sanford Robertson, the founder of Robertson Stephens & Company, a Silicon Valley-based investment bank, and a founding investor of E* Offering, which helps online investors participate in initial public offerings via the Internet; and L. John Doerr, a partner in Kleiner, Perkins Caufield & Byers, a Silicon Valley venture capital firm.
All of them made $5,000 contributions — the maximum under federal law — to Leadership ‘98, the political committee that Gore used to warm up for his presidential campaign. Doerr and Robertson managed to persuade members of their families to do the same. Until Clinton and Gore took the White House in 1992, Robertson had never made political contributions to Democrats. Since then, however, he has given at least $503,100 to the Democratic Party and to individual Democrats running for federal office. Overall, the Silicon Valley “Gore-tech” group has given Democrats at least $1,397,373 since 1993 — most of it to the DNC.
Gore’s high-tech friends have gotten something for their money, chief among them a new market for their products — courtesy of every telephone customer in the United States.
On January 1, 1998, the federal government imposed a flat tax of 3 percent on every telephone call as a means of raising money to make every school in the nation Internet-accessible. Gore and Reed Hundt, then the chairman of the Federal Communications Commission, had dreamed up the idea the year before. (Gore and Hundt are old friends, having been classmates at St. Albans.) The tax raises upward of $2.3 billion a year, which is to be released to the nation’s schools through a program called “E-rate.” Gore and Hundt didn’t have to fight with Congress to get the extra money; the FCC imposed the tax by an act of bureaucratic fiat.
Both long distance telephone carriers and the regional Bell operating companies complained about the tax from the get-go. Then the “baby Bells,” as the local phone companies are commonly called, persuaded the FCC to allow them to pass most of their share of the tax to the long distance carriers. Under the plan, the baby Bells (chief among them BellSouth Corporation and Bell Atlantic — Gore’s No. 2 and No. 13 career patrons, respectively) would pay relatively little. Long distance companies were left to shoulder most of the cost of the “Gore-tax” — at least 80 percent, by their estimate.
When AT&T, MCI Communications Corporation, and other long distance carriers started itemizing the cost of the tax on telephone bills, drawing furious responses from customers who were paying the tab, the FCC responded swiftly. It didn’t repeal the tax. Instead, the FCC stipulated that the long distance carriers couldn’t itemize the charge. As long as the people paying it didn’t know about it, there was no harm done.
The tax costs the average American about $30 a year. The money goes to schools, eventually. Before it gets there, it sits at something called the Schools and Libraries Corporation, one of three not-for-profit operations set up by the FCC to administer the “E-rate” program. From its inception in November 1997 until September 1998, Ira Fishman, a fundraiser for Gore and a former-White House lobbyist, was the president of the Schools and Libraries Corporation. His salary was $200,000 a year — the same as President Clinton’s. His contract also included a $50,000 “performance bonus.” But Fishman had trouble getting the operation off the ground, and when he resigned after just nine months on the job, the Schools and Libraries Corporation had yet to release any funds to schools.
Fishman did, however, find ways to spend money. In the first quarter of its existence, Schools and Libraries Corporation projected its expenses to be $2.7 million; when the receipts were added up, the cost of administering the E-rate program — which hadn’t done anything yet — came to $4.4 million. FCC Commissioner Harold Furchtgott-Roth called the costs “exorbitant and unjustified.”
Now that the “E-rate” program is up and running, some of Gore’s top patrons have climbed aboard the gravy train. BellSouth and Bell Atlantic each made millions of dollars from providing telephone lines to schools. So did software companies like The Learning Company, a division of Mattel, Inc., which makes educational software and Cyber Patrol, a program that blocks students from accessing pornographic sites from school. The Learning Company, Gore’s No. 7 career patron, offers a discount on its Cyber Patrol program to schools participating in the E-rate program. And, of course, connecting all those classrooms — some 2 million of them — to the Internet won’t accomplish much without the computers, monitors, hardware, and software needed to surf the web. Hundreds of high-tech companies — from chip makers like Intel Corporation to software companies like Netscape and Microsoft Corporation — stand to profit handsomely from E-rate.
Whether those profits, and the Internet connections that lead to them, will ultimately help America’s chronically undereducated children, many of whom can’t even read, seems to be of secondary importance. Steven Jobs, the founder of Apple Computer, Inc., has donated computers to schools for years, but in a 1996 interview he voiced doubts about hooking up schools to the Internet. “What’s wrong with education cannot be fixed with technology,” Jobs told a writer for Wired magazine. “No amount of technology will make a dent. It’s a political problem.”
While Silicon Valley has ardently supported a regressive tax even on the poorest American with a telephone, it’s quite opposed to any sort of tax on the wealthier consumers who shop online. On February 27, 1998, President Clinton spoke to an audience of high-tech executives and announced his support for the Internet Tax Freedom Act, which would ban new state or local taxes on goods and services sold online.
It was just what the industry wanted. “We’ve been pushing for this for nine months,” said Eric Schmidt, the chairman and chief executive officer of Novell, Inc., which manufactures computer software and hardware. “This is a big deal. We’re talking about billions of dollars in taxes not happening for high tech. Everyone in the industry is happy.”
“The most you can ever expect from any political contribution,” Jeffrey Hirschberg, the national government relations director for the international accounting firm Ernst & Young told a reporter for The Washington Post in 1996, “is an audience with someone to state your case.”
Ernst & Young, like the Gore-tech group, has spent handsomely to win audiences with Clinton, Gore, and those who work for them. The firm’s partners and their spouses gave nearly $140,000 to Clinton/Gore ‘96. At the time, the firm was actively lobbying Congress for legislation to limit damages in cases where accounting firms are found to have misled investors about the financial condition of a company. (Under heavy lobbying pressure from the nation’s trial lawyers, Clinton vetoed the Private Securities Litigation Reform Act of 1995, but Congress overrode his veto.)
Hirschberg, who was a national finance director of Clinton/Gore ‘96, is now one of Gore’s top 25 fundraisers, “each of whom has promised to raise $100,000. Hirschberg has already exceeded his goal; Ernst & Young is Gore’s No. 1 career patron”. Gore is already expressing his appreciation.
Ernst & Young counts among its clients multinational corporations whose interests range from international taxation to tort reform. The firm also represents some clients with narrower interests. The National Association of Independent Colleges and Universities, for which Ernst & Young has lobbied, advocates tax-free accounts that would enable parents to save for their children’s college tuition. So does Gore. “We help people save for retirement tax-free, and help them pay their mortgages tax-free,” he said in a May 16, 1999, commencement speech at Graceland College in Lamoni, Iowa. “Now we must help them save tax-free for one of the biggest expenses most families will ever face in life: sending a child to college.”
It’s not clear, however, that parents of college-bound children would actually benefit from the subsidy. A 1997 report on tuition tax credits by the Joint Committee on Taxation, the congressional committee that studies tax legislation, makes exactly that point. “Some believe that such incentives, by increasing the demand for post-secondary education, would drive up the prices that educational institutions and their employees charge for their services,” it said. “To that extent, higher prices could transfer the benefit from the taxpayer to the educational institution.” Little wonder, then, that the nation’s universities and colleges, which regularly increase tuition far faster than the rate of inflation, support the proposal.
Colleges and universities are not the only clients of Ernst & Young’s with an interest in tax legislation. In June 1999 the Advisory Commission on Electronic Commerce — a panel created by Congress to study the issue of Internet taxation — began meeting in Williamsburg, Virginia, to consider whether to impose levies on sales over the Internet. Among the materials that the commissioners — some appointed by Congress, others by President Clinton — received was a study prepared by Ernst & Young for a group of companies that included Time Warner Inc., Gore’s No. 12 career patron, America Online, Intuit, and Microsoft, titled, “The Sky Is Not Falling: Why State and Local Revenues Were Not Significantly Impacted by the Internet in 1998.”
Ernst & Young has even won free advertising space for its point of view on Gore’s campaign website, which lists as one of his priorities pursuing “an international agreement to make ‘cyberspace’ a permanent ‘duty-free zone,’ so that U.S. companies can sell goods, around the world, via the Internet, without duties.”
In late October 1995, Sally Aman, Tipper Gore’s chief press aide, telephoned John Cooke, then the executive vice president of the Disney Channel, to ask for a favor. The Gores had no costumes for their annual Halloween costume party, she explained. Could Disney help them out?
Disney did just that. A team of costume makers in Los Angeles made a pair of outfits, based on the main characters in Disney’s motion picture version of “Beauty and the Beast,” to the Gores’ precise measurements. The day before the party, the costumes arrived in Washington, along with a makeup artist to apply the mask that the vice president would wear.
The total tab for Disney’s end of the Gores’ Halloween party topped $8,300. But the Gores didn’t ask for a bill, and Disney didn’t bother to send one. At the time, Disney was awaiting approval for its $19 billion acquisition of American Broadcasting Company, Inc., from the Justice Department and the FCC, chaired by Gore’s longtime friend Reed Hundt.
When The Washington Post reported on the gift of the costumes, the Gores claimed they had no idea what the costumes were worth and blamed an unnamed staff member for not finding out whether the gifts were improper. Under the Ethics in Government Act, neither the president nor the vice president may solicit gifts. After they got caught, the Gores announced that the costumes would be paid for — by the Democratic National Committee.
The FCC approved Disney’s acquisition of ABC in February 1996.
The Halloween-costume episode offers just a hint of the Gore-Disney relationship. The Walt Disney Company is Gore’s No. 9 career patron. The company’s support of Gore goes back to 1988, when he made his first run for the White House. John Cooke sat on Gore’s executive campaign committee, and took on the role of top fundraiser in California. When Gore became vice president, Cooke’s wife started raising money for him, too. Diane Cooke is a trustee of the Vice President’s Residence Foundation, a not-for-profit operation that’s raised hundreds of thousands of dollars for a host of improvements to the Naval Observatory mansion that the Gores have called home since 1993. The Cookes donated $10,000 to the foundation in 1997. A month after Cooke attended a White House coffee with Gore in 1996, Disney gave $50,000 to the DNC.
Cooke isn’t the only Mouseketeer with a direct line to Gore. Michael Eisner, the company’s chairman and chief executive officer, has also been a big contributor to Gore and other Democratic candidates (including Gore’s rival, Bill Bradley). On June 16, 1994, Gore accompanied Eisner to the Washington premiere of The Lion King. At the time, Disney was seeking approval from the Interior Department, which oversees national parks, for its plans to build an amusement park called “Disney’s America” next to the site of the historic Battles of Bull Run, two of the bloodiest conflicts in the Civil War, in Manassas, Virginia. Eisner was in the nation’s capital to round up support for the project. Eventually, public outrage led Disney to cancel its plans in late September 1994, but not before top officials of the Interior Department went on record as saying that the theme park could spark “a livable, vibrant community located between Disney’s America on the west and Manassas National Battlefield on the east.”
The nature of Gore’s relationship with Disney came into sharp focus in late 1998, when members of Congress were coalescing behind the Child Online Protection Act, which would have imposed criminal penalties against commercial websites that display pornography without trying to weed out web surfers under the age of 17. Disney opposed the legislation, largely because it feared some of the bill’s provisions might interfere with its own lucrative website.
David Beier, Gore’s domestic policy adviser, led a White House team in fighting the legislation, which had been rolled into the huge omnibus budget bill — the sort of awkward legislation that no member of Congress reads and every member wants to pass just to get it out of the way. During last minute, behind-the-scenes negotiations between the White House and Republican leaders in Congress, the Beier-led forces lobbied to kill the bill. Representative Michael Oxley, the bill’s original sponsor, told a reporter, “[They] tried like hell to take [the language] out.”
When Disney’s and the White House’s efforts became public, both claimed that they had been trying to “modify” the bill, not defeat it. Disney released a public statement on October 7: “Whether those [requested] improvements were made or not . . . we supported the bills.”
Ultimately, Disney lost the battle. Not only did the language stay in the bill, but Disney appeared to be against protecting kids from harmful Internet content. Gore did his best to help preserve and protect Disney’s squeaky-clean image. He invited executives from the company to a White House “summit” on protecting children from Internet pornography. Jake Winebaum, the president of Disney’s Buena Vista Internet Group, participated in two days of presentations and panel discussions on keeping children away from adult material on the Internet.
If there were any doubts about Disney’s financial interest in deregulating the Internet, they fell away last year. In July 1999, Disney announced that it had completed a deal to buy Infoseek Corporation, which operated a popular Internet search engine, and organized its Internet interests around the new acquisition. The resulting product was the “GO Network,” a kind of all-service website that offers a search engine, directory services, personalized web pages, and links to Disney’s own websites, including Disney.com and Family.com.
Consider the lineup: Tony Coelho . . . resigned in disgrace from the House of Representatives amid charges that he was involved in a sweetheart deal with Michael Milken, the notorious junk-bond dealer. Nathan Landow . . . investigated for trying to influence the testimony of Kathleen Willey, the White House volunteer who alleged that President Clinton groped her in a corridor outside the Oval Office. Franklin Haney . . . indicted on 42 counts of making illegal contributions to Tennessee politicians and investigated by Congress for financial irregularities in the lease of a Washington office building that is now home to the FCC. Maria Hsia . . . indicted for making improper campaign contributions. Howard Glicken . . . convicted of persuading a foreign national to contribute to a campaign. Mark Jimenez . . . indicted for making illegal campaign contributions, and currently a fugitive from justice living in the Philippines.
What do they all have in common?
Albert Gore, Jr.
Some are currently employed by, or otherwise involved in, Gore’s presidential campaign. Others are past associates that Gore would like the public and the press to forget as he pursues the highest office in the land. Consider the case of Tony Coelho. When the California Congressman’s $100,000 junk-bond deal with Milken, then Drexel Bumham Lambert’s leveraged buyout operator, was disclosed in 1989, Coelho resigned from the House rather than face an ethics investigation. He violated federal campaign-finance laws by using a private yacht, High Spirits, owned by Donald Dixon, who looted the Texas-based Vernon Savings & Loan Association. Two political committees that Coelho ran paid a total of $48,451 to reimburse the thrift for use of the yacht; taxpayers spent an additional $1.3 billion bailing it out after it collapsed amid the savings-and-loan crisis. When the House check-bouncing scandal broke in 1992, Coelho was among the top offenders: He’d written $293,000 in rubber checks — more than three times his congressional salary — in a single year.
So when Gore needed to kick-start his campaign in May 1999, to whom did he turn to head his organization? Coelho. The reason is simple: Coelho has few equals in shaking the political money tree. In 1980, when Democrats were reeling after losing both the White House and the Senate in the Reagan landslide, Coelho took over the Democratic Congressional Campaign Committee (DCCC), where he pioneered the use of soft money in congressional elections. In return for huge contributions, Coelho was only too willing to cut special deals.
The Tax Reform Act of 1986 was a case in point. The theory behind the law was simple: By closing a vast number of loopholes that favored a few, everyone could enjoy lower tax rates. Coelho did his best to preserve the breaks for the few. He was the driving force in the House of Representatives for what became known as “the Gallo amendment” — an estate-tax break made-to-order for the owners of the California winery that would save their heirs up to $34 million in inheritance taxes. He fought to preserve tax breaks for independent oil companies, and for sellers of real estate tax shelters. All the while, Coelho said that he opposed the bill because it was a giveaway to the rich.
Under Coelho’s stewardship, the DCCC grew from an organization that held one fundraising event a year to a money machine for House Democrats. In the process, Coelho trained Terry McAuliffe, his finance director at the DCCC, in the ways of extracting large sums of cash from fat cats. McAuliffe learned his lessons well. He was the force behind the White House coffees at which Bill and Hillary Clinton and Al and Tipper Gore hosted wealthy donors with pressing matters before the federal government. An autographed photograph of the vice president hangs on the wall of McAuliffe’s office, with an inscription thanking him for “being the best finance chair in this or any other universe.” In the spring of 1999, McAuliffe signed on to do for Gore 2000 what he had done for Clinton/Gore 1996.
As for Nathan Landow, were it not for him there might not even be a Gore 2000. Back on March 25, 1987, when presidential hopefuls were testing the waters, Gore had decided not to run for president, and made public statements to that effect. But two days later something happened that changed his mind. Landow met with Gore and offered to provide him at least $4 million if he would run. It wasn’t an idle promise. Landow had been Walter Mondale’s top fundraiser in the 1984 election, and he’d organized his network of wealthy friends into a political action committee called IMPAC. All he needed was a candidate. Gore fit the bill.
Landow, a real estate developer and self-styled Democratic kingmaker, had decided that Gore was just the kind of moderate Democrat who could win. On the day of his meeting with Landow, Gore publicly backpedaled on his decision not to run. Instead he said he would “seriously consider making the race.” Two weeks later Gore was off and running, with Landow and his moneymen behind him.
Over the years, Landow’s money apparently has been the glue that’s tied him and Gore together. The vice president called him from the White House as part of his fundraising phone-call campaign to ask for $25,000. “You’ll have it in hand,” Landow replied, “in one hour.” He apparently kept his promise, because Gore later wrote him a thank you note that said, “Thanks! One hour is a record!”
Landow’s involvement in national politics goes back to the 1970s. He helped bankroll Jimmy Carter’s presidential campaign, and Carter repaid him with a nomination for an ambassadorship, though Carter withdrew his name after The Washington Post revealed that Landow had tried to hire Joe Nesline, an illegal-gambling kingpin and Washington organized-crime figure, as a consultant on an Atlantic City casino project. Landow raised money for Carter again in 1980, for Mondale in 1984, and for Gore in 1988. In 1992, Gore brought him on board the Clinton campaign; Landow backed his first winner in a dozen years. He expected to be rewarded for his success.
For years the Cheyenne-Arapaho Indians struggled to regain a parcel of land in Oklahoma seized by the federal government, in violation of a treaty, in 1869. Frustrated time and again in their fruitless attempts to reclaim the mineral-rich land, the tribe’s elders decided to play the Washington game. In June and August 1996 they depleted their welfare fund, which paid for medical costs and food for the impoverished tribe, by making $107,000 in contributions to the Democratic National Committee. Representatives of the tribe were invited to attend a luncheon at the White House for their largesse, but nothing else happened.
Then the tribe’s lawyer, Richard Grellner, was told to contact Landow, who suggested that they pay a $100,000 retainer and $10,000 monthly fee to Peter Knight, Gore’s former Senate chief of staff and the chairman of Clinton’s 1996 reelection campaign. Landow wanted his own cut as well: 10 percent of anything that the Cheyenne-Arapaho earned, including any revenues from oil and natural gas. Short on cash, the poor tribe declined and took the matter to the Senate Governmental Affairs Committee, which concluded its investigation by determining that “a collection of Democratic fundraisers and operatives” had “fleeced” and then “abandoned” the Indians. In March 1998 the DNC offered to return the tribe’s contribution.
Asked about his role in the Cheyenne-Arapaho deal by a correspondent for Frontline, the PBS program, Landow blamed the Indian tribe. He told interviewers from the show, “They want the land given back to them on a platter. . . . They brought in innocent people like me. They’re a bunch of goddamned uneducated Indians.”
Landow isn’t just a man looking out for his own interests. He’s happy to help out a powerful public servant whenever a problem arises. He tried to arrange a real estate deal involving a Washington office building for Webster Hubbell around the time that the former associate attorney general pleaded guilty to bilking his partners in the Rose Law Firm out of more than $400,000 and promised to cooperate with independent counsel Kenneth Starr’s investigation. Landow also flew Kathleen Willey in a private jet to his Maryland home when he learned that Paula Jones’ attorneys wanted her story. When asked about the trip by Starr, Landow cited the Fifth Amendment and declined to testify.
[Note: Hubbell resigned from the Justice Department in March 1994. In December 1994 he entered his guilty plea. Starr was dissatisfied with the level of Hubbell’s cooperation, and in June 1995 Hubbell was sentenced to 21 months in prison, of which he served 16. In April 1998 Starr brought new indictments against Hubbell, alleging that he evaded payment of taxes amounting to $894,000.]
Not everyone is so reticent to talk when asked questions by prosecutors. On June 28, 1999, in a federal courthouse in Washington, Donald Condra of Chattanooga explained how Franklin Haney, a wealthy Tennessee real estate developer and longtime friend of Al Gore, had given him $1,000 to contribute to the 1996 Clinton-Gore campaign. Haney’s administrative assistant, Gloria Thurman, told Condra not to mention the source of the donation. “She said, ‘Treat it as a gift from Mr. Haney, and since you’d received the gift, you’d decided to contribute to the campaign,’” Condra testified.
In 1998, Haney was indicted on 42 counts of making nearly $100,000 worth of illegal contributions to political campaigns. He’d funneled the money through straw donors to various Democratic party candidates, including Clinton and Gore. Government prosecutors produced ledgers from Haney showing payments made to employees and friends, and indicating that they were reimbursements for political contributions.
In 1999 a jury acquitted Haney on all counts, accepting the argument that while Haney may have broken the law, he was not aware he was doing so. “Nobody committed a crime because nobody thought they were doing anything wrong,” Ted Wells, Haney’s defense attorney, told the jury in his closing statement. Ignorance of the law, in the case of Haney, a longtime political fundraiser who ran for Congress in the 1960s and governor of Tennessee in the 1970s, turned out to be an excuse. Chris Lehane, a spokesman for Gore, announced that the vice president was “pleased for Franklin and his family.”
While Haney may not be an expert in campaign-finance law, he knows enough about the ways of Washington to have arranged for buildings he owns to be leased by the Tennessee Valley Authority and the Social Security Administration. And in 1995, Haney hired Peter Knight to help him close a real estate deal in the nation’s capital with the FCC. Knight delivered. The FCC signed a lease to occupy the Portals, an office complex in southwest Washington, D.C., that guaranteed it would pay rent even if it wasn’t occupying the building. Haney’s company was paid $19 million in rent before the FCC’s first moving truck pulled up to the front gate.
Haney rewarded Knight for his work: On the day that officials of the FCC signed the contract to move, Haney sent Knight a check for $1 million. Haney maintains that the payment to Knight was for a variety of services over a number of years. But the House Commerce Committee concluded in December 1998 that “Mr. Haney paid his representatives millions of dollars in fees upon the successful closing of the Portals transaction, in which the federal government agreed to specific lease changes sought by Mr. Haney.” The House passed its evidence on to the Justice Department, which, after launching a preliminary investigation, dropped the case the following month — in January 1999.
Like Haney, Maria Hsia was indicted on multiple (six) counts of making illegal contributions. (Her trial is scheduled for January 2000.) Hsia arranged the infamous Buddhist temple fundraiser of 1995, at which Gore was photographed walking out of the temple, wearing a lei and shaking hands with monks. Hsia stood next to Gore in the photo.
Gore originally met Hsia at a fundraising event for his 1988 presidential campaign. She had moved to the United States as a student in 1973, earned a hefty sum of money by bringing new clients to immigration lawyers, and by 1982 had begun raising money for Democrats. Shortly after meeting Gore in 1988, she wrote to a handful of senators, including Gore, asking them to participate in a “cultural and educational” trip to China. She did not make the exact purpose of the trip clear. But she did make it understood that if Gore would participate, she and her “colleagues” in California would help contribute to his presidential campaign. “If you decide to join this trip,” she said in a letter to Gore, “I will persuade all my colleagues in the future to play a leader role in your presidential race.” All of the senators she asked declined the invitation — except Gore.
During the same year that Hsia met Al Gore, she began a business relationship with two men who would be implicated in the Clinton-Gore fundraising fiasco of 1996: Indonesian businessman James Riady and his right-hand man, John Huang. It was Hsia who helped Riady and Huang learn the ropes of political fundraising in the United States. Together they organized a political action committee, the Pacific Leadership Council, to raise money for politicians in Washington.
After the trip, Gore and Hsia worked out a mutually beneficial business relationship: Gore would serve as her principal contact on Capitol Hill; Hsia would help line up contributors to Gore’s Senate campaigns. In 1996, when Gore was scrambling to raise money for the Clinton-Gore ticket, Hsia came to his aid. She organized an event for Gore at His Lai Buddhist Temple in Hacienda Heights, California. There was, however, a big problem with the fundraising event: The temple is a nonprofit religious organization and so by law cannot make political contributions. In February 1998 a federal grand jury indicted Hsia for soliciting $65,000 in illegal contributions from the temple for the DNC. The indictment also included her solicitations from the temple for other Democratic campaigns from 1993 to 1996.
What did Gore know about the event and when did he know it? At first he said that it was only a “community outreach event” and that “no money was offered or collected at the event.”
Later he called it “a political event” and acknowledged knowing “that there were finance people who were going to be present.” Finally he admitted that his participation in the event was “inappropriate.”
Along with Haney and Hsia, Howard Glicken and Mark Jimenez have two things in common. Both of them have helped raise money for Gore, and both have been indicted for violating federal campaign-finance laws. Jimenez was indicted for laundering money to the Clinton-Gore campaign in 1996. Glicken was indicted for laundering money to the Democratic Senatorial Campaign Committee in 1993.
Glicken and Gore are friends. Glicken, the president of the Miami-based Americas Group, which helps small Latin American companies go public in the United States, has two expensive Jaguars in his garage with license plates that read “GORE 1” and “GORE 2.” Glicken has been one of Gore’s political benefactors since his first run for the presidency in 1988. Months after Gore moved into the vice president’s residence in 1993, Glicken donated a $6,000 pool table for the house.
During Gore’s first term, when Glicken was a finance vice chairman for the DNC, he became the insider’s insider. In 1996 he raised $2 million for Clinton, Gore, and other Democrats; he visited the White House 70 times, spent at least one night in the Lincoln Bedroom, and even flew on Air Force One. On more than one occasion he has hosted Gore in Miami.
In 1998, in Washington, D.C., Glicken pleaded guilty to two misdemeanor counts of soliciting political contributions from a foreign national. Not only had he asked Thomas Kramer, a German citizen working and living in Florida as a real estate developer, for $20,000 in contributions, but Glicken had also told him how to evade the law by funneling the contributions to a Democratic Party committee through Kramer’s secretary, a U.S. citizen. A judge sentenced Glicken to 18 months probation, fined him $80,000, and ordered him to perform 500 hours of community service. After Glicken was sentenced, a Gore aide who refused to be identified told the Associated Press that Glicken would have no role in the vice president’s future campaigns.
In 1996, Mark Jimenez was an eager Democratic donor. As the majority owner of Future Tech International, a Miami-based company that exports computers to South America, he was in a position to give much of his money away and still lead a very comfortable life. On March 23, 1995, Jimenez gave $20,000 to the Vice President’s Residence Foundation.
But in 1998 he became a fugitive. A grand jury in Washington, D.C., indicted Jimenez 17 counts of illegal political contributions. He’d allegedly laundered $39,500 through his employees at Future Tech. After the indictment, Jimenez turned up in the Philippines, where he reportedly was an unpaid special adviser to Philippine President Joseph Estrada. Jimenez has since been indicted on additional charges of tax evasion and fraud. In late 1999, the Justice Department was negotiating his extradition.
On May 8, 1996, at a DNC fundraising dinner in Washington, President Clinton praised the man he had chosen to head his reelection effort. “Any man who can pick your pocket and still win your applause,” he said, “deserves to be the campaign manager of the Clinton-Gore campaign.” Clinton was describing Peter Knight, to whom Gore has turned in 1999 to raise money for his own presidential bid.
When Gore started his political career in Washington in 1977, he hired Knight, a graduate of Georgetown Law School who had already been working for two years as an aide on Capitol Hill, to be his administrative assistant. The two have been joined at the hip ever since. Knight followed Gore to the Senate in 1985 and then managed Gore’s 1988 presidential campaign. After that he became a lobbyist, and in January 1993, with the inauguration of Clinton and Gore, he became the best-connected lobbyist in Washington.
In 1991 Knight had joined Wunder, Diefenderfer, Ryan, Cannon and Thelen, a Washington law firm that had a roster of corporate clients with both the means and the incentive to throw money at politicians. Among them: tobacco companies (RJR Nabisco and Philip Morris Companies, Inc.), oil companies (Ashland, Inc.), and timber companies (Kimberly-Clark Corporation and MAXXAM, Inc.). As a lobbyist, Knight found himself ideally situated to ask his clients for contributions to his former boss, and eventually Knight cemented a new role for himself as Gore’s unofficial “chief of fundraising.”
In 1992, Gore picked Knight to run his vice presidential campaign, and in 1996, Gore persuaded Clinton to make Knight the chairman of the 1996 Clinton-Gore campaign. In that capacity, Knight raked in about $19 million in soft money for the DNC.
Knight also was Gore’s choice to raise money for the Vice President’s Residence Foundation, originally organized by Dan Quayle in 1990 and charged with “preserving and furnishing” the vice president’s official residence. The fund also served as a convenient way for donors to gain direct access to Gore. In the two years that he raised money for the foundation, Knight collected more than $300,000.
Three of Knight’s clients — Bell Atlantic, Fluor Corporation, and West Publishing Corporation (by way of its chairman, Vance Opperman) — made $10,000 contributions to the foundation. In response to the Center for Public Integrity’s faxed questions about his contribution to the foundation, Opperman’s secretary said: “Mr. Opperman did see the fax, and he chose to disregard it. He threw it away, so you won’t be hearing from him.”
The list of $10,000 donors to the Vice President’s Residence Foundation also includes ARCO, the Coca-Cola Company, the Walt Disney Corporation, MCI (now MCl/Worldcom), Time Warner, and Franklin Haney. Bill Gates, the chairman of Microsoft Corporation, donated a sculpture valued at $30,000.
Knight’s handiwork paid off when it was time to raise money for Clinton’s reelection. He organized a June 6, 1995, dinner for Gore’s top financial supporters at the Naval Observatory. The event was well-choreographed, as a memo to Gore that included these instructions on how he was to behave makes plain: “During the cocktail party, please mingle with guests . . . please engage in conversation with guests . . . please be sure to thank everyone for generous support. . . . This is a very core group of supporters who are very enthusiastic about supporting you.”
Among those attending the dinner were Disney’s John Cooke; Jim Free, a Washington lobbyist for the American Petroleum Institute and R. J. Reynolds Tobacco Company, among other interests; Howard Glicken; Franklin Haney; and James Edwards, then the chairman of ICF Kaiser International, Inc., whose directors included Tony Coelho.
Also attending the affair were William Haney III and Victor Gatto, two executives of Molten Metal Technology, Inc., of Waltham, Massachusetts. William Haney, who is not related to Franklin Haney, was among the first to pledge $50,000 to the Clinton-Gore 1996 campaign. On May 1, 1995, Knight wrote Haney and Gatto an appreciative thank you note that read, in part, “Your participation in this program will give you a special place of significance with the vice president and put you first in line.”
That “special place of significance” was worth millions to Molten Metal. The company is one in a long line of firms that have attempted to reprocess liquid nuclear waste into nonradioactive solid materials. Since the advent of nuclear energy, government officials and private companies have promised that reprocessing would eliminate the threat that nuclear wastes, some of which remain lethal for thousands of years, pose to people and the environment.
Unfortunately, reprocessing has never worked, either as a commercial or a government-sponsored enterprise. In the 1960s, 1970s, and 1980s, various companies, sometimes with the aid of the Department of Energy, have tried — and failed. General Electric Company built a plant in Morris, Illinois, that employed a process that worked in the laboratory but not in the factory. The facility never opened. Getty Oil Company got into the business in 1969, and quickly realized it couldn’t make a go of it. In the 1980s, Allied-General Nuclear Services operated a facility in Barnwell, South Carolina, which wouldn’t have opened without massive government aid. By 1983 the plant had notified its 300 employees that it was going out of business.
Nonetheless, on April 18, 1995, Vice President Gore stood alongside Haney in Falls River, Massachusetts, at one of Molten Metal’s factories and announced: “Molten Metal is a success story, a shining example of American ingenuity, hard work, and business know-how.”
Molten Metal was a success of sorts, but not at reprocessing. It received by itself more research grants from the Energy Department during the Clinton administration than the 17 other companies that applied for such grants combined. Molten Metal even won some $27 million worth of contracts after November 1995, the month experts at the Department of Energy concluded that the company’s technology did not work. Despite the recommendation from inside his agency that all further contracts with Molten Metal be suspended, Energy Undersecretary Thomas Crumbly, a former aide to Gore and a close friend of Peter Knight’s, continued to approve government grants for the company.
Knight himself was on the payroll of Molten Metal. Haney, the company’s chairman, paid him $7,000 a month plus lucrative stock options. Haney even gave a gift of 640 shares of the company’s stock, worth some $10,000 at the time, to Knight’s 13-year-old son.
The shares, however, soon depreciated in value. In October 1996, Molten Metal announced that it had overestimated the amount of money it would realize from Energy Department contracts by some $12 million; the price of the company’s stock plunged with the news. Irate investors initiated a shareholders suit, claiming that some insiders sold out just before the announcement was made. By December 1997 the company was forced to file for bankruptcy, and a share of its stock, once valued at nearly $40 on the strength of the company’s revenue from government contracts, could be had for less than a nickel.
The House Commerce Committee investigated the dealings of Knight, Crumbly, Gore, and Molten Metal in November 1997. Knight was indignant that the members of the committee questioned, among other things, the gift of stock the company had made to his son. “Any suggestion that stock was given to my 13-year-old son for improper purposes is patently false and outrageous,” he said in a statement to the committee. He offered no explanation for the gift other than his friendship with Haney. Neither did Haney, although an April 8, 1996 letter he wrote to Knight sheds some light on his motive. “Our objective is to keep you and other of the more talented people with us right up until you are secretary of state.”
In 1998 the Justice Department, after conducting its own investigation of Knight, closed the case, which gratified Gore. “Peter Knight is one of the most honorable, honest men I have ever known in my life,” he told a reporter for The New York Times. He didn’t mention what position Knight would hold in his administration should he win the presidency.
Top Ten Career Patrons
Total : $125,200 Soft Money to Democratic Committees, 1991-June, 1999: $897,960
Total : $104,000 Soft Money to Democratic Committees, 1991-June, 1999: $614,379
Total : $99,250 Soft Money to Democratic Committees, 1991-June, 1999: $1,456,300
Total : $98,000 Soft Money to Democratic Committees, 1991-June, 1999: $557,000
Total : $91,950 Soft Money to Democratic Committees, 1991-June, 1999: $648,547
Total : $89,750 Soft Money to Democratic Committees, 1991-June, 1999: $356,900
Total : $76,000 Soft Money to Democratic Committees, 1991-June, 1999: $137,425
Total : $74,500 Soft Money to Democratic Committees, 1991-June, 1999: $173,050
Total : $68,000 Soft Money to Democratic Committees, 1991-June, 1999: $1,877,605
Total : $67,950 Soft Money to Democratic Committees, 1991-June, 1999: $200,000
This list is based on individual and PAC contributions to Gore’s House campaigns from 1977-1984; individual and PAC contributions to Gore’s Senate campaigns from 1983-1992; contributions to the Vice President’s Residence Foundation from 1993-1998; individual and PAC contributions to Gore’s 1988 presidential campaign; individual and PAC contributions to Leadership ‘98 from 1997-98; and individual contributions to Gore’s 2000 presidential campaign through June 30, 1999. Gore’s presidential campaign is not accepting PAC contributions. The second column is based on soft money contributions to Democratic committees from 1991 through June 30, 1999.
Sources: Federal Election Commission; Center for Responsive Politics; Vice President’s Residence Foundation.
1. Includes contributions from employees of Ernst & Young; its predecessor Ernst & Whinney, and its subsidiary, E&Y Kenneth Leventhal.
3. Includes contributions from employees of BellSouth and its predecessors, South Central Bell and Southern Bell.
4. Includes contributions from employees of D.E. Shaw & Co., from employees of Juno Online Services, which was founded by D.E. Shaw; from David E. and Beth Kobliner Shaw; and from their family members.
5. Includes contributions from employees of Citigroup and the companies that have contributed to the creation of Citigroup, including Citibank, Citicorp; Travelers Corp.; Salomon Smith Barney (and its predecessors, Salomon Brothers and Smith Barney); Shearson Lehman; and EF Hutton.
6. Includes contributions from employees of Viacom and its subsidiaries, including Paramount Pictures (formerly Paramount Communications); Showtime Networks, MTV Networks; Nickelodeon, Spelling Entertainment; and Simon & Schuster.
7. Includes contributions from employees of Mattel and its Broderbund subsidiary. Primarily, however, this money is from employees of The Learning Company, which was acquired by Mattel in 1999.
9. Includes contributions from employees of The Walt Disney Company and its subsidiaries, including The Disney Channel; Miramax Films; ABC, Inc., and Buena Vista Publishing.
Books
The Buying of the President 2004
- Introduction
- Equal Rights, Unequal Protection
- Private Parties
- George W. Bush - The Texas Years
- George W. Bush - The War President
- George W. Bush - The Administration
- Wesley Clark
- Howard Dean
- John Edwards
- Richard Gephardt
- Bob Graham
- John Kerry
- Dennis Kucinich
- Joe Lieberman
- Carol Moseley Braun
- Al Sharpton
- Conclusion
- Acknowledgements
The Buying of the President 2000
