Campaign Finance Investigations Were So Different in the Nineties
Compared to today’s political environment, my encounter with the House Oversight Committee twenty-five years ago seems quaint
I read the other day that the total amount of money spent going into the midterm elections was somewhere in the neighborhood of $17 billion.
That's right, $17 BILLION. And that figure doesn't include the amount spent on the Georgia runoff election.
To put that number in perspective, President Biden has canceled the student debt of roughly 700,000 borrowers for about the same amount of money.
It’s not just the billionaire donors. According to OpenSecrets, donors giving $200 or less gave more than $747 million to congressional candidates — $138 million more than in 2018 and four times more than in 2014.
But here's where it gets crazy: that amount only represents the disclosures required by federal law. The truth is we have no idea exactly how much money is being spent on elections in the United States, thanks to regulatory loopholes in federal election laws.
Ultra-rich donors have a myriad of legal loopholes that allow them to skirt Federal Election Commission (FEC) regulations, according to the Brennan Center for Justice:
The true extent of megadonor giving is unknown but certainly higher as gaping loopholes in federal law, and in many states’ laws, make unlimited, anonymous spending in politics — or “dark money” — easy.
Although dark money groups have reported less and less spending to the Federal Election Commission in recent years, that appears to be because they have shifted spending to forms that aren’t required to be reported. Analysis by OpenSecrets shows that four party-aligned dark money groups pumped almost $300 million into this election cycle by giving to sister super PACs or buying cleverly worded ads — without reporting their spending or their donors. There are hundreds more politically active groups pouring secret money into our elections.
The disclosure rules that are in place show how bad the problem of megadonor dominance has gotten — and which special interests politicians are beholden to.
We can all agree that political spending is out of control. But when has money not been in our politics to some extent? I'm reminded of the time nearly thirty years ago when the specter of campaign finance came my way.
How my startup investment company got sucked into a campaign finance investigation
The mid-nineties were the Bill Clinton era, and for a brief moment in time, Little Rock was the political center of the universe.
Most Arkansasans were totally unprepared for the phalanx of journalists and celebrities who descended on the city. It wasn't unusual to see members of Clinton’s cabinet walking around downtown Little Rock.
While it was an exciting time to be in Little Rock, sometimes it wasn't. The media’s general perception of Arkansas was that we were a bunch of uneducated bumpkins. They seemed unfamiliar with the number of ultra-wealthy individuals in the state. So when they saw people driving around town in Porsches and Ferraris, they concluded something nefarious must be happening in Arkansas.
I’ve mentioned previously how, in the early nineties, I started a financial services business. While my firm ultimately became an investment bank, that’s not where it began. I first tried my hand at the exportation of raw commodities, without much success.
That said, the company developed relationships with companies like Arkansas-based Riceland Foods, the largest miller and marketer of rice in the world. That relationship made it possible for my company to export rice to Africa and China.
One potential client was a company led by a guy named Charlie Trie, the Taiwanese owner of Fu Lin, a local Chinese restaurant. Everyone in the business community loved Charlie’s restaurant. It was one of Bill Clinton’s favorite places to eat.
Aside from his restaurant, Trie had a side hustle, a company named Daihatsu International Trading. The company was ostensibly an exporter of products like blue jeans and rice to Asia. Since my company was trying to develop a rice export business, naturally Trie was a good person for us to know.
Several times a week, we’d receive faxes from Daihatsu with a list of commodities the company was interested in purchasing. He even visited my offices on the 35th floor of what was then known as the TCBY Tower.
In the end, Trie was a lot better at running his restaurant than trading commodities. Because of this, we never did business together.
One day, my receptionist told me a visitor was on their way up to the office. The “visitor” turned out to be an FBI agent. He was there to serve me with a congressional subpoena.
If you're of a certain age, you may recall the numerous Republican investigations into the Clinton administration. One such probe surrounded the campaign finance controversy, more commonly referred to as Chinagate. One of the people caught up in the scandal was Charlie Trie.
It seems that, aside from Fu Lin and his export side hustle, Charlie Trie was a prolific fund-raiser for the Democratic Party. But there was a problem: the funds that Trie routed to Democrats appeared to come from China, something that is illegal.
Although my company never did any business with Trie or Daihatsu, the company's numerous faxes to my company got the attention of Dan Burton, a Republican congressman from Indiana.
Burton was the chairman of the House Government Reform and Oversight Committee, which was investigating the Chinagate scandal. That was the reason the FBI agent showed up at my office that day.
In our current political environment, the committee would probably leak my name to the media. Trolls would destroy my timeline on Twitter. My many skeletons would be the subject of conspiracy theories. Perhaps my lawyers would advise me to ignore the congressional subpoena.
Fortunately for me, I was served a subpoena in the 1990s, so none of that happened. Believe it or not, I didn't even hire an attorney. Not that I could afford one.
Crazy as it may seem today, I picked up the phone and called the lawyers for the Oversight Committee. Fortunately, my subpoena was for the production of documents, so I wasn't required to appear before the Oversight Committee in person. I sent the committee copies of a few faxes and never heard from them again.
When the dust settled, Trie took a plea and received probation:
The deal with Trie came nearly 2 1/2 years after federal investigators first pursued him as a key figure in their probe of the 1996 Clinton-Gore campaign. While Justice Department officials hailed the arrangement as a sign of progress, critics of the campaign finance probe argued that so much time has passed that Trie's testimony is unlikely to have a major impact.
As the conduit for more than $600,000 in contributions to the Democratic National Committee that had to be returned as coming from illegal or suspect sources, Trie has long been viewed as a potential font of information on whether Democratic Party or White House officials knowingly accepted improper funds and on alleged efforts by the government of China to influence the presidential election…
…The key allegation against Trie stemming from the 1996 campaign is that he used contributions to purchase access to high-level government officials--including 22 visits to the White House and a nomination to a federal commission on foreign trade--with the objective of advancing his private business interests. But it has never been clear what Trie may have sought or gained for himself or his business associates.
A few years later, I closed my investment business and went to work on Wall Street. About six months after moving to New York, I had another encounter with the FBI that resulted in yet another federal subpoena.
But that's a story for another day.