Money Machine: The Fund-Raising Frenzy Of Campaign ' 96
Outsiders Made Erie Ballot a National Battle
By Guy Gugliotta and Ira Chinoy
Washington Post Staff Writers
Monday, February 10 1997; Page A01
The Washington Post
Second of four articles
ERIE, Pa.
On a morning in late October, with only a week to go in his fiercely contested reelection race. Rep, Phil English was listening to his car radio when a breathy female voice came on the air:
«Is Medicare financially sound, or is it going bankrupt?» the voice asked. «Vote on Nov. 5 to send Congressman English back to Washington to continue his fight to save Medicare!»
The ad was slick, it was flattering, and it lasted a whole minute. But English, a Republican freshman who had been born and raised in Pennsylvania's 21st Congressional District, had no idea where the ad had come from.
Like so many political advertisements last fall. «Medicare» dropped into this lakefront city like a mortar round, fired unbidden by one of nearly a dozen outside interest groups who transformed English's race into a battleground for control of the U.S. House of Representatives.
The fireright among the interlopers frequently left candidates feeling like bystanders at their own elections. «It was disorienting, like having a debate with an air-raid siren in the background,» English said.
The pro-English «Medicare» spot ended with the disclosure that it had , been paid for by the American Hospital Association (AHA). It cost $10,000 and aired 250 times in the last two weeks of English's successful race against Democratic challenger Ron DiNicola. That money was only a trickle in the torrent of campaign cash sluicing into Pennsylvania 21 from all points of the political compass: from national political parties, from state parties, from business, from labor, from liberals, from conservatives, from the candidates themselves,
«As this thing grew, it grew out of the control of Phil English and Ron DiNicola,» said Chris Hagerty, manager and part owner of WFLP talk radio in Erie. «They didn't, know where the next bullet was coming from, and they didn't know if they were firing the gun or it was being shot at them- It was like a 'Star Wars' thing, being controlled from up in space.»
If Washington was the epicenter of campaign abuse during the 1996 election, it was in places like Pennsylvania 21 that the excesses played out. Political parties and interest groups alike spent unprecedented sums to saturate the airwaves and otherwise tout their views and candidates.
Slugfests took place in dozens of congressional districts, especially those where incumbents were considered vulnerable. Outsiders spent overwhelming sums to influence individual campaigns with their own ads and organizers. Under court rulings and election laws, if parties or interest groups didn't «collude» with or openly endorse a candidate, spending was almost unrestricted,
In the microcosm of Pennsylvania 21, cash led to cacophony. If it wasn't the AHA, it was the AFL-CIO, if it wasn't the liberal Citizen Action, it was the conservative Citizens for the Republic Education Fund. During one 20-hour stretch in early November, more than 500 campaign ads aired on Erie's television stations.
All the noise, however, did not appear to stimulate voter enthusiasm. English won reelection by 3,750 votes out of 210,000 cast, 10,000 fewer votes than were cast in 1992, the last election in which both the White House and congressional seat were contested.
Exactly how much was spent in Pennsylvania 21 will never be known, because much of the cash fell outside federal or state disclosure requirements. English spent more than $1.2 million, nearly triple what he'd used to win the seat in 1994, and dwarfing DiNicola's $468,000.
But political parties and interest groups also funneled at least $1.4 million into the race, according to FEC reports, local television station records and interviews with advocacy officials. Most of that money went into TV and radio spots, easily exceeding the $833,000 spent collectively on media ads by the two candidates.
«I have a real problem as a citizen to have outside influences from Philadelphia, Washington, wherever,» said John Kanzius, manager and part owner of WJET-TV in Erie. «[They] have no interest after the election in how the economy and business of our community will be affected.»
National Forces Move In
English, now 40, was a prominent lawyer's son with a long career in state and local government before he won a congressional seat in 1994 - part of the sweep that gave the GOP control of Congress.
His district, stretching along the state's northwestern edge from Erie south to the Pittsburgh suburbs, was predominantly Democrat and pro-union, with an economic base in steel and other heavy industries. Pennsylvania 21 voted for Democrats Michael S. Dukakis in 1988 and Bill Clinton in 1992.
From the day he took office in January 1995, English recently recalled, he knew the Democrats had painted a bull's-eye on his back. It took only three months before they fired the first shot in his reelection campaign - long before English even had an opponent.
Just before Easter in April 1995, the Democratic Congressional Campaign Committee (DCCC) paid Erie television stations less than $1,000 to air an ad in which English's smiling face slowly «morphed» into that of House Speaker Newt Gingrich (R-Ga.), an unpopular figure in the district.
«We voted for change last November,» a voice said over eerie music. «But is this the change we wanted? Instead of voting for us. Congressman Phil English voted the way Newt Gingrich told him - 94 percent of the time.»
The DCCC called the ad «Changeling» - a low-cost experiment in demonizing Gingrich in a district with a GOP congressman who the Democrats considered too conservative for his constituents. In retrospect, «Changeling» was probably the defining moment in English's reelection campaign. Originally he had calculated that holding his seat would cost him. $600,000; now $800,000 seemed more realistic.
By the end of 1995, English would increase the estimate to $1 million. By Election Day, he ended up spending even more. «Changeling» demonstrated to him the impact that powerful outside forces could have m one of the country's smallest three-network television, markets. English steeled himse.lffor further onslaughts,
Response to the ad m Pennsylvania 21 also showed DCCC political director Rob Engel that «Changeling» worked, so well ia fact that Democrats eventually would make Gingrich the focus of their national strategy to recapture the House. For now, though, Engel quickly pulled the ad in Erie, hoping English would go back to sleep.
He didn't. «The lines were drawn,» said Erie County GOP Chairman John Mizner. «Changeling,» he added, «brought national focus to a very local situation.»
About the same time, national, labor unions 'began taking shots at English, using inexpensive television ads to attack his voting record. Federal law forbids unions to spend membership dues on «political advertising,» but voicing opinions about an incumbent's voting record is a constitutional right.
«We never said to people that local XYZ says vote for this guy,» said Karen Ackennan, staff director for the AFL-CIO's political department. «We said, make up your own mind.» It was clear, however, what labor had in mind.
In early July 1995, labor upped the ante when the «95 Project,» a new organization based in Washington and funded by unions and liberal interests, sent professional organizer Bill Burke to Erie to start a «grass-roots» lobbying effort.
Burke stayed in Erie through the election as big labor's hired gun. «It's like he came from Mars,» WFLP's Hagerty said. «He didn't have a history. He just showed up.»
The 95 Project - which became the 96 Project at the turn of the year -spent as much as $150,000 in English's district to pay Burke, distribute flyers and hold news conferences attacking English and Republican policies, according to 95 Project records. .
In a small television market. Burke and others had observed, it was often easier to get on the six o'clock news than to make the local newspapers. Late in the year, 95 Project, along with Citizen Action, another pro-labor coalition, hired a steamroller, put a Phil English dummy at the wheel and ran over mannequins labeled «senior citizens.» It made every newscast.
English counterattacked by denouncing «Washington party bosses» intruding in local politics. But as time went on, it became clear that many advocates in Pennsylvania 21 responded to a Washington «boss,» whether someone working out of a tiny office on K Street, such as 95 Project headquarters, or out of the mausoleum-like U.S. Chamber of Commerce, one of English's biggest boosters.
But their goals were the same: to seize victory in swing districts. By mid-1995, political parties and advocates from both right and left had reviewed census records and 1994 election results to identify 35 to 40 vulnerable House seats. On those political battlefields, control of the House would be won or lost.
Each of these key districts - and English's stood high on every list -hired big sums of outside money. It wasn't long before charges and countercharges of «carpetbagging» began flying around Erie. But in fact, Pennsylvania 21 was flooded with carpetbaggers working both sides of the election.
Pressed Into Counterattack
By late 1995, Ron DiNicola, an attorney who had unsuccessfully sought the 1994 House Democratic nomination, had emerged as English's likely opponent. He was 10 days older than English, an immigrant bricklayer's son who joined the Marines after high school and subsequently went to Harvard College and Georgetown Law School.
DiNicola's biggest vulnerability was that he had a law office in Los Angeles and was splitting time between his California firm and a second practice in Erie. English could cast him as a carpetbagger, too.
At first, however, everything appeared to be going DiNicola's way. In January the AFL-CIO hammered English in a TV spot for slashing Medicare benefits. «Another vote is coming,» a voice warned over an elderly woman's anguished face. «This time we'll be watching.»
The ad was a «cookie-cutter,» a favorite television tool of both parties and interest groups. Cookie-cutters used a similar text and montage across the country but substituted different faces and subtitles to fit different districts.
The cookie-cutter ad hurt English, especially since OOP fortunes were plummeting with two government shutdowns in Washington. English decided to buy a «responder» ad of his own - a rare counterattack this early in a House race.
«Our biggest advantage was that English was having to spend money to deal with a perception of weakness that we hadn't even put there,» said Cormack Flynn, DiNicola's campaign manager. «It was a dream situation. English was out there defending himself against phantoms.»
English's internal polls showed his popularity plunging 10 points in April, despite his responder ad. But the Republican was hardly defenseless. He had the incumbent's built-in fund-raising advantage. Moreover, he was a member of the tax-writing Ways and Means Committee, the first OOP freshman to hold a seat there since a young Texas congressman named George Bush in 1967.
That assignment gave English a voice in big-ticket legislation: health care, Social Security, the minimum wage. It also offered access to well-connected lobbyists and lured substantial campaign contributions.
English had a healthy war chest, and on April 15 he bought a television ad publicizing his own tax return and asking DiNicola to do the same. DiNicola had asked the Internal Revenue Service for an extension but instead of acknowledging that, the Democrat temporized, English bashed him for six weeks. DiNicola's poll numbers starred to shrink.
The tax return flap, as English had hoped, provoked DiNicola .into spending some of his own precious dollars on a response ad of his own, accusing English of selling out to Gingrich and «Washington special interests.»
English didn't back off. In late spring he ran off a string of negative television ads branding DiNicola as a California interloper «California office, California driver's license ... and a great tan.»
DiNicola was still low on money and reeling. Some Democrats wondered why English didn't spend more then and finish him off. «That's easy for them to say because they didn't pay the bills,» English said recently. Given the number of outside interest groups looking for his scalp, the incumbent believed there was no telling who else he would have to fight and at what cost. He couldn't try for a quick kill in the spring, only to go broke in October.
English, with more money to buy more ads, did a more effective job tarring DiNicola as a carpetbagger than DiNicola did tying English to «special interests.» But neither candidate was funding his campaign out of Erie.
DiNicola hated fund-raising and had to be constantly prodded to do it, according to his aides. As a challenger playing catch-up to an incumbent, DiNicola also knew that much of his money would have to come from beyond Pennsylvania 21, where the median household income is $25,845.
«Our area, our constituents give in the $50, $100, $150 range,» DiNicola said in an interview. «It's difficult as a Democrat.»
Nearly as many of DiNicola's largest individual contributors were from California and New York as from Pennsylvania. And the vast majority of his political action committee (PAC) money came from out-of-state labor groups.
English was dependent on outside money, too. By late 1995 he had collected $355,000, 10 times as much as DiNicola. PACs, most of them out of state, would eventually account for more than half of English's $1.2 million in contributions. '
In late spring, new outside groups began pouring money into Pennsylvania 21. To counter the AFL-CIO, for example, the U.S. Chamber of Commerce and a self-proclaimed «Coalition» of other business groups spent $135,000 on ads and direct mail.
The national Republican Party also entered the race in a big way. Ed Brookover, political director at the National Republican Congressional Committee (NRCC) had noticed in December 1995 that the Democratic National Committee was transferring money to state parries, which simply funneled the money to media consultants.
To Brookover, this seemed to stretch federal election rules requiring national and state parties to mix large «soft money» contributions with «hard money» generated through more closely regulated individual contributions. State parties could use a higher percentage of soft money.
At first, Brookover later recalled, he thought the Democrats were breaking the law: «Aha, we've got them!» he told colleagues. But the NRCC lawyers said they believed the Democrats had found a legitimate loophole. «You mean,» Brookover asked, «we can do it, too?»
Yes, the lawyers answered. Brookover wasted no time. The Republicans spent at least $340,000 on television ads alone in Pennsylvania 21, with much of that money funneled through the state party.
Shifting to Straight Poison
In. the summer, English took the high road. He bought radio spots that featured constituents praising him for helping a couple adopt a child in Russia, for getting an electric wheelchair for an Erie senior and for pushing the Army Corps of Engineers to dredge the beach at the Presque Isle resort. The campaign bespoke the power of incumbency and of the Ways and Means Committee. Challengers made promises, but incumbents delivered. Still, English walked a fine line. He didn't want constituents to see him as a dreaded «insider.»
In the fall, both sides went to straight poison. The AFL-CIO's ground troops abandoned «issues advocacy» and went to work as DiNicola volunteers. Union headquarters in Washington ran a barrage of «educational» ads lambasting English.
DiNicola's closing TV ads touted his credentials and contrasted his natty appearance with a portly English standing beside Gingrich; «Ron DiNicola: Our Vote, Not Newt's.»
English closed with two ads trashing DiNicola for defending clients linked to Ayatollah Ruhollah Khomeini in Iran and to the Mexican torturers of murdered Drug Enforcement Administration agent Enrique Camarena; «Phil English: Independent Voice, Pennsylvania Values.»
English was not particularly proud of the ads but contended that he needed to cut through the din to seize voter attention.» 'Ayatollah' and 'Camarena' probably won it for us,» English later observed, «but they polarized the electorate.»
As October ended, both sides were pouring money into TV ads, filling daily breaks on «Wheel of Fortune» and other evening favorites. The conservative Citizens for Republic Education Fund, a new group which refused to disclose its funding sources, aired more ads in Erie on election eve than either candidate.
In this cacophony, one Republican Party ad stood out. A heavyset cigar-smoking «union boss» reached into a briefcase and handed wads of cash across the table to a pal: «The big labor bosses in Washington, D.C., have a big scheme to buy the Congress,» the narrator intoned. «They've spent $150,000 here on ads favoring Ron DiNicola.»
English was appalled at his own party's judgment. «If they had asked me,» he said, «I would have told those guys that attacking big labor is not a particularly effective strategy in Erie.»
Then it was over. In DiNicola's view, it all came down to money. I'd have beaten him,» he said, «with $100,000 more.»
But it was the outsiders who transformed a local congressional race into a national battle royal. And without substantial changes in election laws, northwestern Pennsylvanians are confident the advocates will be back in 1998.
«You've only seen the tip of the iceberg,» said WJETs Kanzius. «You could run a dead man.»
THE THRUST AND PARRY OF POLITICAL ADS
In Pennsylvania 21, outside interest groups and parties spent more on TV ads than the candidates themselves. Such «issue ads» were unrestrained by federal spending rules, as long as the groups didn't «collude» with a candidate or openly advocate his election. Despite that rule, as these commercials make clear, it was usually obvious which candidate the ads favored - or disdained,
A DEMOCRATIC AD; «Changeling»
Announcer; «We voted for change last November, but is this the change we wanted? Instead of voting for us...
... Congressman Phil English voted the way Newt Gingrich told him -94 percent of the time. Newt told Phil to cut school lunches, education, job training...
... so that the wealthy special interests could get a tax break. And Phil English did. He's working for Newt, not for us.
Phil English has put the interests of his party leadership before the people of Pennsylvania.
That's gonna change.»
TYPE AT BOTTOM OF SCREEN:
«Paid by Democratic Congressional Campaign Committee»
A REPUBLICAN AD: «Chapter Two»
Announcer «The big labor bosses in Washington, D.C., have a big scheme to buy the Congress.
They've spent $150,000 here on ads favoring Ron DiNicola because big labor wants to buy control of Congress,»
Woman; «They think they can buy Congress?»
Announcer: «They oppose requiring welfare recipients to work; they're for higher taxes and against a balanced budget...
... The big unions spend money on ads because they want Ron DiNicola to vote their way.»
Woman: «So who's going to represent me?»
Announcer: «Tell the big labor bosses Pennsylvania is not for sale.»
TYPE AT BOTTOM OF SCREEN:
«Paid for by Pennsylvania Republican State Committee»
THE MONEY CAME FROM ALL OVER
In this intense campaign, incumbent Phil English (R) and challenger Ron DiNicola (D) at times seemed incidental. As a whole, party committees and interest groups spent more than either candidate. The outsiders poured at least $1.4 million into the race, mostly on ads. Because many of those expenditures did not have to be reported, the total may never be known.
CANDIDATES
English 1994 $417.000
DiNicola 1996 $468,000
English 1996 $1.2 million
OUTSIDE GROUPS
1996 At least $1.4 million
Including Democratic Congressional Campaign Committee, National Republican Congressional Committee, Pennsylvania Democratic Party, Pennsylvania Republican Party, AFL-CIO, 95 Project and 96 Project, U.S. Chamber of Commerce, The Coalition, Citizen Action, Citizens for the Republic Education Fund, Public Citizen, American Hospital Association PAC, National Right to Life PAC, International Brotherhood of Teamsters and others.
NOTE: Candidate expenses for 1995-96 are through Nov. 25, 1996.
SOURCES: Federal Election Commission, Campaign Study Group database of candidate spending, Erie television station records, interviews with interest groups.
ABOUT THIS SERIES
* SUNDAY: The 1996 campaign was not only louder, longer and more expensive than any election in U.S.
history, but ultimately led to criminal investigations, embarrassment for the major political parties and the most intense pressure to overhaul the
American electoral system since Watergate. How did it come to
this?
* TODAY: If Washington was the epicenter of campaign abuse during the 1996 election, it was in places like Pennsylvania's 21st Congressional District where the excesses played out. National political parties and outside interest groups spent unprecedented sums to saturate the airwaves - to the point that the candidates felt like bystanders.
* TUESDAY: When Congress passed a minimum wage increase last August, lawmakers touted the bill as a simple measure to help the working poor. But congressional benevolence extended far beyond blue-collar beneficiaries by giving billions in tax breaks for industries and interest groups that had contributed heavily to congressional reelection campaigns.
* WEDNESDAY: Once hailed as the two-fisted enforcer that would protect American politics from future Watergate scandals and the corrupting scourge of unregulated campaign cash, the Federal Election Commission has proved to be weak, slow-footed and largely ineffectual. Those deficiencies never seemed more glaring than during the 1996 campaign.
@CAPTION: Rep. Phil English (R-Pa.), left, defeated Democratic challenger Ron DiNicola.
©CAPTION: COUNTING ON 'CARPETBAGGERS'
RON DiNiCOLA, the defeated Democrat, walking his puppy, Sierra, in Erie Pa.
Nearly as many of DiNicola's largest individual contributors were from California and New York as from Pennsylvania, and most of his political action committee money came from out-of-state labor groups.
REP. PHIL ENGLISH, the victorious Republican, talking with a local reporter in Erie.
English was dependent on outside money, too. Political action committees, most of them out of state, eventually accounted for more than half of English's $1.2 million in contributions.
© Copyright 1997 The Washington Post Company
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