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Senate looks into web of secret donors to GOP campaign

Senate investigators have pieced together evidence of a web of non-profit groups, political consultants and wealthy conservatives who secretly intervened to help dozens of Republicans in last year's elections.

Millions of dollars were spent on TV ads, many of them attacks on Democrats, during the waning weeks of the 1996 campaign. Some of the aid helped Republicans who had run out of their own campaign funds.

It appears to have been a highly coordinated campaign to counter a similar onslaught on behalf of Democrats by organized labor. There was a key difference, however: The GOP action was carried out in extreme secrecy, using the anonymity afforded non-profit organizations.

The law allows such groups to engage in issue advertising as long as they don't advocate election or defeat of a particular candidate. The law also allows them to collect unlimited amounts of money without disclosing who gave it or how it is spent. Newly disclosed bank records show millions of dollars poured in from a relatively few wealthy activists.

"There is a danger when you can't see the money," said Steve Salmore, a Drew University political scientist and consultant to GOP candidates. "The public should be able to see it and decide whether this is proper or not."

Groups involved in last year's GOP network included Americans for Tax Reform, the National Right to Life Committee, Citizens for Reform, Citizens for the Republic Education Fund and the Coalition for Our Children's Future. Evidence suggests the groups were in close touch with each other and the Republican Party.

Some of the groups were connected through Triad Management, a political consulting company run by Carolyn Malenick, a former fund-raiser for Virginia Senate candidate Oliver North.

In a promotional video, she called her firm a "rapid-fire" mechanism for Republicans and made clear that it was candidates, not issues, that counted most: "If we need to move, or have $100,000 put into a congressional race tomorrow, where are we going to find it?"

Democrats on the Senate Governmental Affairs Committee have pressed unsuccessfully for hearings on the GOP's use of non-profit groups for political activity. On Friday the panel's chairman, Fred Thompson, R-Tenn., suspended hearings.

In an interview, Thompson said the use of non-profits is very troubling. "We have no campaign-finance system. We have no limitations when all you have to do is run it through a straw man. . . . It is a sham deal."

Interviews with five people familiar with the Coalition for Our Children's Future, along with internal documents obtained by the Associated Press, show how the non-profit network operated.

The coalition was formed to promote the idea of a balanced budget, went dormant and was revived during the 1996 campaign to provide secret political muscle. Those interviewed would not allow their names to be used.

The coalition was formed May 30, 1995, at the behest of Haley Barbour, then chairman of the Republican National Committee. Barbour and top aide Don Fierce recruited the staff, who began soliciting mostly corporate executives.

A memo produced from RNC files outlined plans for a June 6 fund-raising meeting convened by R.J. Reynolds Tobacco lobbyist Tommy Payne at the City Club, a lobbyist hangout in Washington. Another memo to Fierce from coalition director Barry Bennett said the group "desperately needs" Speaker Newt Gingrich to make a pitch for support to Raymond Gilmartin, chairman of the pharmaceutical giant Merck.

Barbour's influence is apparent in the documents, as is coordination with people inside the presidential campaign of Bob Dole. At one point, the coalition was preparing briefing materials for donors. "Haley's approval?" asks a memo. Barbour also was to send a letter to Ross Perot, seeking support from the billionaire.

The documents show the coalition sought money from the Better America Foundation, a non-profit Dole organization criticized by some as an undercover way of promoting Dole's candidacy. Dole closed the foundation in June 1995, and coalition documents suggest contributions from the tobacco industry and others were contingent on how Dole disposed of foundation assets.

After airing almost $4-million in TV ads promoting the Balanced Budget Amendment, the coalition fell dormant in early 1996. Republicans had been battered by the government shutdown, and the coalition's directors believed it was defunct.

But that summer the group was revived by Robert Odell Jr., a political consultant based in the Virginia suburbs. He had been approached by Denis Calabrese, a Houston GOP consultant, who brought a client with money to contribute to political causes. Neither returned phone calls.

Calabrese's client was the Economic Education Trust, a mysterious group that about the same time was giving $2.8-million to two other politically active non-profits, Citizens for Reform and the Citizens for the Republic Education Fund. Investigators think the trust is linked to Koch Industries, a Kansas-based oil company owned by David and Charles Koch. The two men have been generous to conservative and libertarian politicians and causes.

A Koch spokesman refused to comment.

The trust contributed $700,000 to the Coalition for Our Children's Future, used to buy issue ads in congressional contests. The biggest chunk, an estimated $500,000, went to attack Mary Landrieu, a Democrat who went on to win a tight Senate race in Louisiana.

Secrecy was extraordinary. In August, Odell asked Bennett _ who by then was working full time on the re-election campaign of Rep. Frank Cremeans of Ohio _ to sign an oath promising not to reveal the donor's name. The secrecy agreement was drafted by lobbyist and former RNC counsel Ben Ginsberg, who said it was done to protect aided politicians from charges of quid pro quos if they also helped the donors.

Later, Odell came again to Bennett and got him to sign dozens of blank checks on the coalition's account. The checks were used to pay consultants and media buyers for the issue campaigns. But the coalition also used them to transfer money to other conservative groups that were doing their own political advertising.

A check for $150,000 was sent to the National Right to Life Committee on Oct. 11, 1996. The coalition also wired $10,000 to Americans for Tax Reform on Aug. 22.