D'Amato Collected Million$ In "Soft" Money

by David Corn

But he's no fool. He quickly shelved his Whitewater obsession and switched channels: He fought for Holocaust victims screwed by Swiss banks, he supported the nomination of the openly gay James Hormel as U.S. ambassador to Luxembourg and he championed pro-patient rules for women with breast cancer. Jews, gays and women -- he practically morphed into Barbra Streisand.

It's amazing he didn't throw himself into traction with all that bending over backward to appeal to natural Democratic constituencies. A few months ago a friend of mine overheard D'Amato saying he would vote for any liberal piece of legislation he had to in order to deny his Democratic challenger an issue. What principle. But in one regard, D'Amato didn't changed. He still kept a taste for special interest campaign contributions and kept taking legislative actions that benefitted the balance sheets of his backers. Look at his donors, then look at his conduct in the Senate -- only a sucker would believe the former did not influence the latter.

D'Amato has been one of the more prominent beneficiaries of the soft money con. In this scam, corporations, millionaires and unions slip gobs of money (often in the $100,000 range) to political parties for what's called "party-building" activities. These dollars are not supposed to flow directly into the campaign chests of individual candidates, for that would undermine the tight limitations on what a person or political action committee can give to a politician. (Under "hard money" rules, an individual is allowed to contribute $1000 per election to a candidate.) But in the real world, soft money is funneled into mechanisms -- such as ads and voter registration efforts -- designed to assist specific candidates. By exploiting this planet-size loophole, both parties have rendered campaign finance laws essentially meaningless. Those with heaps of money are not restricted by the hard money limits; instead they write larger checks to soft money accounts. And D'Amato has been a key GOP soft money bag man.

As chairman of the National Republican Senatorial Committee in the last election cycle, D'Amato collected $29 million. As a leader of the state Republican Party, he helped it pocket $3.6 million in soft money in the first half of this year. Any sentient citizen would have to wonder how all this money-chasing has colored his votes. Here are three instances that justify that wonder:

Last year D'Amato, using his position on the Finance Committee, pushed through a measure providing a mega tax break to 27 companies, most notably Alliance Capital Management, which manages more than $260 billion in assets. Under the provision, publicly traded partnerships like Alliance Capital are treated more favorably than limited partnerships or corporations. The gain to Alliance Capital (and the loss to taxpayers): about $70 million a year. Why treat such businesses differently? It's hard to see the social good in that. But between 1995 and 1998, Alliance Capital and its parent donated $105,000 in soft money to the GOP. The parent company and its executives have given $94,000 to D'Amato's current campaign. Coincidence? Congruence? Cause and effect? That's just it: How's a voter to know?

As chairman of the Banking Committee, D'Amato has promoted legislation to change laws so credit card companies can pay "affinity groups" (such as professional associations that offer credit cards to their members) for referrals for real estate settlement services. The measure sounds esoteric, but let's put it in plain talk: kickbacks. The legislation was sought by MBNA Corp., a commercial credit card company. The Consumer Federation of America assailed this move because it would increase the cost of settlement services for homebuyers and because it creates a situation in which consumers can be too easily misled into believing the referrals they receive are endorsements and not the results of financial arrangements between the affinity group and the credit card company.

Why make life harder for a homebuyer? MBNA and its honchos gave $127,500 in soft money to D'Amato's National Republican Senatorial Committee in the last election. In this election cycle, the company has given $125,000 in soft money to the New York state Republican Party. And it is the largest hard money donor to D'Amato's campaign, kicking in $235,000.

D'Amato has been in the forefront of the crusade to pass legislation eliminating existing barriers between banks, securities firms, insurance companies and other businesses. Why should non-Wall Streeters fret about this? A coalition of consumer groups offered reasons for concern: "A few examples -- your recently widowed aunt is the beneficiary of a large insurance policy. Within days of her husband's death, she is harassed over the phone by a stockbroker affiliated with the insurance company pushing her to invest in funds with huge amounts of unsuitable high-risk derivative instruments. Or, your cousin who suffers from a terminal illness has dreamed of owning his own home and applies for a loan at a bank. The bank's health insurance affiliate shares information about the terminal illness with the loan officer without anyone's knowledge, denying your cousin his dream of home ownership." Even Business Week in June wrote of an "Orwellian scenario" made possible by this proposed legislation: You're diagnosed with a serious disease, and your credit-card company, which is affiliated with your insurance company, learns of this and reacts predictably: It slashes your credit limit.

When Senate Democrats on D'Amato's committee tried to amend the bill to force financial institutions to inform customers how information might be shared within a conglomerate, D'Amato and his Republican comrades voted it down. D'Amato may squawk about $1.50 ATM charges, but on the big deals he's on the side of the Wall Streeters. And you guessed it -- the GOP has banked more than $13 million this election cycle in soft money from the insurance, securities and banking industries. The financial industry has also dumped more than $2.8 million into D'Amato's current campaign.

D'Amato's coziness with corporate contributors or his accomplished exploitation of an institutionally corrupt campaign system was not been much of a campaign issue. After all, Schumer accepted millions from the same crowd. Instead, the two campaigns exchanged bursts of bile. D'Amato called Schumer a liberal. Schumer dubbed D'Amato a liar. Then after D'Amato referred to Schumer as a "putzhead" and Schumer declared his outrage, CNN aired a segment where Ed Koch (D'Amato supporter) and Rep. Jerrold Nadler (Schumer fan) argued whether "putz" is a more derogatory term than "schmuck." Good television, but pathetic political discourse. Which was probably just fine by D'Amato's contributors -- and Schumer's: They didn't want debates on tax breaks and conglomeratization.

Real and important differences do exist between D'Amato and Schumer. D'Amato was worth voting against because he's in bed with the National Rifle Association and a consistent foe of abortion rights. (On these positions, he was dug in too deep to shift.) But when it comes to big-money politics, neither D'Amato nor Schumer is a pisher.