United States. Congress. House. Committee on House.

Influencing elections : political activity of labor unions : hearing before the Committee on House Oversight, House of Representatives, One Hundred Fourth Congress, second session, March 21, 1996 online

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Y4.H 81/3: EL 2/21

Influencing Elections: Political Ac...






MARCH 21, 1996

lSm »mmo m ,

SEP I J sss

". -



For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ISBN 0-16-052888-7


M.H 81/3: EL 2/21

[influencing Elections: Political Ac...






MARCH 21, 1996


SEP ' 8 1996



For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ISBN 0-16-052888-7


WILLIAM M. THOMAS, California, Chairman
VERNON J. EHLERS, Michigan VIC FAZIO, California






Stacy Carlson, Staff Director
TOM Jurkovich, Minority Staff Director



Opening Statements:

The Honorable William M. Thomas, Chairman 1

The Honorable Vic Fazio, Ranking Minority Member 2


Thomas Durbin 10

Paige Whitaker 21

Leo Troy 28

Reed Larson 33

Harry Beck 60

Charlene Haar 76

Marshall Breger 96




House of Representatives,
Committee on House Oversight,

Washington, DC.

The committee met, pursuant to call, at 10:20 a.m., in Room
1310, Longworth House Office Building, Hon. William M. Thomas
[chairman of the committee] presiding.

Present: Representatives Thomas, Ehlers, Dunn, Diaz-Balart,
Ney, Fazio, Hoyer, Jefferson, and Pastor.

Staff Present: Stacy Carlson, Staff Director; Roman Buhler,
Counsel; Dan Crowley, Counsel; James Sivesind, Associate Coun-
sel; Laura Buhl, Stan Assistant; Janet Giuliani, Office Manager;
Christopher Wright, Professional Staff; and Carla Tully, Staff As-

The Chairman. The Committee on House Oversight will come to

I want to welcome everyone to the fourth hearing in what has
every indication of being the most extensive examination of our
campaign finance laws since the original passage of the Federal
Election Campaign Act and amendments in the 1970s.

Just to refresh everyone's memory, the first hearing obviously
was to lay the groundwork. We started with the Speaker and the
Minority Leader and several panels of Members who were advocat-
ing change primarily focusing, on political action committees.
Based upon the wide range of legislation, we moved into a number
of other areas of desired change in the election laws as well.

The second hearing — which was held on November 2 — finished
up with many of the Members who had legislation in front of us.
Since then, there have been a number of other Members who intro-
duced legislation that have requested to be part of a hearing at
some time in the future so that they could get their views out in
these series of hearings. But the primary focus of the first two
hearings was on corporations' political action committees.

There were, I believe, several unions there as well, focusing on
the structure and the mechanics of the PACs themselves. We also
heard from people who thought not only that there was a constitu-
tional right to have a PAC, but that PACs did good things as well.
These hearings were, I think, one of the first hearings in which
PAC advocates were given an opportunity to present their views on
a panel for any extensive period of time.

The third hearing, on December 12, focused on political parties.
We had both national party chairs, Haley Barber, from the Repub-


lican Party, and Donald Fowler from the Democratic Party, in what
I thought was an interesting panel, because, as you might guess,
they wound up agreeing more than disagreeing because of the role
of political parties and their concern about these unique institu-
tions and their inability to do what they view as appropriate activi-
ties within the political arena.

In addition to the party chairs, we had some professors, an aca-
demic panel, if you will, discussing the recent history of political
parties and the concern that these unique and valuable institutions
should be changed under the law to allow them to be even more
unique in their operation within the system.

In addition to that, we had some State party chairs to talk about
not just the national parties, but the relationship between the
States and the Federal parties under the Federal law.

So we come to the fourth hearing in the continuing series, and
it was to focus on another unique institution. The more I actually
have been looking at it, the more unique I realize it is, and that
was the political activity of labor unions. We had hoped for not just
the examination of labor union political activity, which would be a
secondary concern, but the way in which unions fit in under the
law similar to the examination with political parties and political
action committees.

We had sent out invitations to the newly elected president of the
AFL-CIO, Mr. Sweeney; president of the International Brother-
hood of Teamsters, Mr. Carey; and the Secretary-Treasurer of the
AFLr-CIO, Mr. Trumka.

We had received letters, one 2 days ago and then one late last
night, a letter on behalf of both Mr. Sweeney and Mr. Trumka,
stating that they would not participate in the hearing.

So the hearing today will be more an academic examination, and
those who perhaps would not be as supportive of labor union activi-
ties as the officials of the labor unions that we thought would come
and express a positive justification, defense, and opportunity to
profess the right and desire of unions to participate in the process,
much the same as we have had with the leaders of the political
parties and those individuals who are members of and supporters
of the PAC movement.

But having the decline of the labor union participation, this com-
mittee obviously then will be having a hearing which is in part
truncated, and we will try utilizing the Congressional Research
Service to run as objective an analysis of the unions as we can,
with the hope that in the near future the union representatives
will participate in what will ultimately be the longest running,
most complete examination of election law since these pieces of leg-
islation went on the books in the 1970s.

With that, I would yield to the gentleman from California for any
opening statement that he might like to make.

Mr. Fazio. Thank you, Mr. Chairman.

I think everybody on this committee realizes that the need for
meaningful campaign finance reform has become even more obvi-
ous with each passing election.

As part of the high price of modern elections, most of us have
concerned ourselves with somehow limiting spending, but perhaps
the greatest cost of our present campaign ritual is the way in

which it has contributed to the deep public distrust over the elec-
tion process itself.

Surely I speak for all of us when I say that we absolutely must
earn back the trust of our citizens if any of us, Democrats or Re-
publicans or emerging independent forces, are to serve as rep-
resentatives of the people and effectively govern in a democracy
such as ours.

The Democratic majority in recent years worked at great length
to craft a reform bill that would bring together the differing points
of view in order to pass legislation that brought significant im-
provements to our political system. And in fact, after much effort,
Democrats successfully passed a campaign finance reform bill in
1994. Unfortunately, we had little, if any, Republican support for
our effort, and it died as a result of filibuster in the Senate.

With the new Congress, many of us had been hopeful that we
could work together toward the kind of reforms that are needed
and desired by so many in the public. And, indeed, in this commit-
tee we had embarked on a promising beginning.

As the chairman has said, our first three committee hearings on
the issue of campaign finance reform represented a fair, well bal-
anced effort to present topics of bipartisan concern. Such an ap-
proach, together with the many informal conversations taking place
among members on both sides of the aisle, on this committee and
off, offered us all reason to be optimistic.

I had originally understood that this hearing would be a continu-
ation of that earlier approach; that, for purposes of campaign re-
form, we would explore the issues known as independent expendi-
tures and voter education projects. These are issues that should be
of concern to the American people and all of the political parties.

The indication had been that we would put together this hearing
in a manner that fully examined the issues and treated both sides
fairly. In fact, in the belief that we would be exploring a wide range
of political groups and activities, I signed a letter with the chair-
man which was sent out to some 20 organizations asking for infor-
mation and, I quote, "an upcoming hearing on independent expend-
itures and other voter education projects."

Let me read to you the recipients of that joint letter that re-
quested information: The AMA, Planned Parenthood, the NRA, the
Sierra Club, the National Right-to-Life Committee, the Christian
Coalition, the AFL-CIO, the Teamsters, Common Cause, among
numerous others.

Despite that promising beginning, the Majority has chosen to
pursue a radically different objective in this hearing. No longer are
we going to have a hearing that explores the political activities of
a cross-section of interest groups; no longer can we expect to have
the opportunity to ask questions of such groups as Citizens for a
Sound Economy or Pat Robertson's vast political organization, and
other such groups that spend hundreds of millions of dollars out-
side the Federal election system promoting their views in support
of Republican candidates and their causes.

Rather, the Majority has now deliberately chosen to exercise its
power to conduct a one-sided inquiry into the legitimate political
activities of working men and women who make up the American
labor movement.

Everyone interested in reform should be aware that more money
was spent on voter education projects during the last election cycle
than all the so-called soft money spent by the political parties com-
bined, and, unlike the case with these voter education efforts, the
non-Federal or so-called soft money spent by those political parties
is reported and disclosed to the public for all to see.

This topic, the enormous amount of money being outside the Fed-
eral system of limits and disclosure, is in desperate need of
thoughtful review and discussion. Unfortunately, the Majority now
contrives to single out labor unions for selective attention while ig-
noring the numerous other groups invested in the voter education

Such a decision by the Majority, in my view, strips away all pre-
tense of fairness or bipartisanship and reveals the true motive of
this hearing. The Majority's transparent purpose in today's pro-
ceeding is to put the labor movement in their cross-hairs for having
the apparent audacity to publicly oppose the Republican agenda in
this Congress.

Organized working men and women have announced, in the
words of John Sweeney, that their message in the coming months
would be: "no cuts in medicare, medicaid, education, or worker pro-
tections to pay for a tax cut for the rich or the big corporations."

This is a message that has found no comfort in today's Repub-
lican Congress but which plainly represents the views of tens of
millions of wage-earning families concerned about their futures.

The greatest sin of working people — or so it would appear from
the fact that only labor was called to this hearing — was in declar-
ing their intention to dedicate resources in organizing its member-
ship and educating the public on these positions, positions clearly
at odds with the goals of the Republican majority.

In this Republican Congress, when working people organize and
try to educate the public about the need for a livable minimum
wage or the importance of medicare or social security, the Repub-
licans have hauled them before a congressional committee, first by
Senator Simpson and now by this committee.

When, however, those who support a capital gains tax cut or the
repeal of environmental laws and worker protections, spend hun-
dreds of millions of dollars similarly informing the public, they
seem to deserve not a seat at the committee's witness table but a
seat at the Majority's legislative table, where they meet with Re-
publican leadership on a weekly basis and promote their legislative

I have been advised by staff that representatives of labor have
chosen not to attend today's inquisition. In all fairness, who can
blame them? Surely they, too, recognize the real intent of this

I spoke earlier about the need for our regaining the public's
trust. One way to do that is to openly and honestly debate the
major issues of the day. It is evident that today's hearing is not in-
tended to honestly explore bipartisan campaign finance reform, and
for the Majority to single out the labor movement today reeks of
a partisan vendetta.

This is an obvious effort to politically intimidate working people,
pure and simple. It is an abuse of power by the Majority, a breach

of public trust, it is wrong, and the Democratic members of this
committee have no intention of taking part in it any further.

Thank you, Mr. Chairman.

The Chairman. What a joke. You ought to leave somebody here
to find out just how evenhanded this is going to be, in case you
want to know. Oh, I guess not.

Well, I guess I will take the prerogative of the Chair and respond
to the gentleman from California.

The same statement about a one-sided hearing could have been
made about the first hearing when we had only Members of Con-
gress. He could have accused us of not being evenhanded because
we didn't bring in corporations or unions or representatives of po-
litical action committees; we had only Members of Congress.

He could have made the same accusation about the second hear-
ing when we brought in the corporations and unions who were fo-
cused on the question of PACs; because we hadn't brought in the
political parties, it couldn't be evenhanded.

He could have made the same criticism about the third hearing.
Instead, he chose to make the criticism about the fourth hearing.
He apparently has the opportunity to make the same criticism
about the fifth hearing and the sixth hearing and the seventh hear-
ing, although we are in the business of preparing those other hear-

The gentleman from California, the ranking Minority member
said, at the hearing on November 2, "I hope people will think big
thoughts," he said, "and come up with some new concepts, because
in the past, we have been victimized by Murphy's Law more often
than not." In fact, all of the efforts to bring about the disclosure,
the accountability, that the PAC system personifies were done in
the name of reform.

He goes on to say this was a way of bringing middle manage-
ment, white collar workers, into the political process equivalent to
what the organized labor movement had brought about.

If the gentleman from California was doing a comparison be-
tween the PAC hearing and organized labor, I would think it would
be appropriate to examine just what organized labor is doing to
bring about this equivalency statement.

In addition to that, if anyone would renew recent headlines, not
only is it timely to deal with labor unions, but they seem to nomi-
nate themselves for this examination.

Here is an article — and I would ask unanimous consent to place
it in the record — that was in the Washington Post on January 21.

Headline: "AFI^CIO To Target 75 House Districts."

Headline: "Labor Group Hopes to Restore Democratic Control in
the Chamber."

The first paragraph: "The AFL-CIO plans to target 75 key con-
gressional districts in this year's elections in an effort to win back
Democratic control of the House, Federation officials said yester-

It goes on to talk about, President John Sweeney presented an
election plan to a closed-door meeting of the Federation's ruling ex-
ecutive council. It said, "unions would spend $35 million in the
election campaign." How and where, we are not sure.

[The article follows:]

AFL-CIO To Target 75 House Districts


(By Frank Swoboda)

The AFL-CIO plans to target 75 key congressional districts in this year's elections
in an effort to win back Democratic control of the House, federation officials said

Privately, union leaders have written off any hopes of winning back Democratic
control of the Senate, but they said they believe they have a legitimate chance to
reverse the Republican majority in the House. At worst, union leaders said, they
have a chance to reduce the size of the Republican majority.

AFL-CIO President John Sweeney, who presented the election plans to a closed-
door meeting of the federation's ruling executive council, said unions would spend
$35 million in the election campaign. He said the spending was "substantially more"
than the federation has spent in past elections, but he declined to provide specifics.

Another federation official said the spending level was seven times more than the
organization normally spends in federal elections. The $35 million does not include
money spent in the elections by individual unions or the volunteer field work that
labor plans in the targeted districts.

Sweeney was elected president of the 13 million-member labor federation last fall
on a pledge of organizing new members for the labor movement. He targeted a mini-
mum of $20 million a year for organizing efforts by the federation to supplement
the efforts of individual unions. The goal: 1 million new members.

But union leaders this week said there was no way labor could organize 1 million
members in the short term and the election push was a way the new leadership
could quickly demonstrate results for both the public and the AFL-CIO's 78 member

Sweeney would not identify the 75 House races being targeted until he had a
chance to discuss the effort with the union leadership.

The AFL-CIO also plans to ask its member unions to endorse President Clinton
at a special March meeting of the federation's general board. Sweeney had originally
planned to endorse Clinton this week, but a number of unions balked at giving the
president such an early endorsement while the White House was still negotiating
key budget issues.

Top AFL-CIO officials met with Clinton for nearly two hours Jan. 8 and urged
him to hold fast against Republican budget demands, particularly in the areas of
Medicare and Medicaid and the tax cuts being proposed by the GOP. Labor is par-
ticularly adamant in its opposition to a reduction in the capital gains tax rate.

Sweeney said yesterday that labor's message in this year's federal elections would
be: "No cuts in Medicare, Medicaid, education or worker protections to pay for a tax
cut for the rich and big corporations."

Labor plans to coordinate its grass roots election efforts with a push to organize
new members in a "Union Summer" campaign. It plans to send 1,000 young organiz-
ers into the field to work on union membership campaigns.

These organizers also are expected to help supplement the efforts of political
operatives labor sends into the field for the elections.

AFL-CIO Credit Card Deal Would Mean Coveted Cash

(By Stuart Silverstein)

In a deal that would bring the labor movement at least $375 million in the next
five years for organizing drives and other campaigns, the AFL-CIO has reached a

!>reliminary agreement with a financial services firm on a new credit card program
or union members.

AFL-CIO spokesman Ray Abernathy said Thursday that the tentative pact is a
model for innovative ways that unions can use their buying power and investments
to further their aims.

The $375 million in royalties from the program would be split among the AFL-
CIO and its 79 member unions. With the AFL-CIO's current annual budget at
roughly $70 million, the funds would represent a major infusion that could finance
such initiatives as the federation's recently announced grass-roots political program.

The AFL-CIO's executive council, concluding its four-day meeting here, author-
ized the labor federation to negotiate a final agreement with Salinas, Calif. -based
Household Credit, a unit of the giant finance company Household International. The
AFL-CIO's current credit card arrangement with Bank of New York, which expires

in a year, has produced insignificant revenue for the labor federation, officials said.
It has provided credit cards to 2 million of the 13 million union workers affiliated
with the AFL-CIO.

Under the new card program, striking workers could go up to six months without
having to pay their principal or interest on their accounts. Household Credit also
agreed not to oppose union organizing of its workers.

Separately, the AFL-CIO executive council approved a reorganization that will
close four to six of its 12 regional offices. Officials said the fate of the Los Angeles
office has not been determined.

The Chairman. On February 23, the L.A. Times ran a headline:
"AFL-CIO Credit Card Deal Would Mean Coveted Cash." The date-
line is Bal Harbour, Florida, apparently a midwinter labor union
officials' meeting in Florida.

In a deal that would bring the labor movement at least $375 mil-
lion in the next 5 years for organizing drives and other campaigns,
the AFL-CIO has reached preliminary agreement with the finan-
cial services firm on a new credit card program for union members.

There are a number of other headlines indicating that labor
unions mean to participate in the political process in a manner and
level that they have never done before.

But I guess the primary reason we tried to invite the labor union
officials to this particular hearing is that they have announced and
are planning on holding a convention in Washington this week and
that they are here and about planning their convention.

For convenience and appropriateness, we thought we would
make sure that this hearing was scheduled with an opportunity to
hear from the newly-elected officials in a newly-revitalized labor
union movement to involve themselves in the political process like
they have never involved themselves before.

I perhaps anticipated the gentleman from California's walkout
when, in the response letter to our letter that had been sent March
8 to Mr. Sweeney and Mr. Trumka, which we received late yester-
day afternoon, March 20, the closing sentence was, "We believe
that a balanced review of campaign finance laws is a worthwhile
endeavor and would be glad to work with your committee on such
an effort in the future."

House of Representatives,
Committee on House Oversight,

Washington, DC, March 8, 1996.
Mr. John Sweeney,
President, AFL-CIO,
Washington, DC.

Dear Mr. Sweeney: The Committee on House Oversight will continue its series
of hearings on issues related to the financing of federal campaigns on Thursday,
March 21, 1996. This hearing will focus on the role of "non-federal" funds, i.e. those
that fall outside the Federal Election Commission disclosure requirements, in influ-
encing the outcome of elections. In past hearings, the Committee has heard wide-
ranging testimony on the role of PACs and political parties in the elections process.
This hearing is the logical next step in our efforts to examine the relationship be-
tween contributions, expenditures and election results.

There has been extensive press coverage (copies of pertinent articles attached) of
the AFL-CIO's plan for a national effort to spend money and resources on political
activities during 1996. The AFL-CIO's election effort is within both the scope and
interest of the Committee as we gather information necessary to draft comprehen-

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