The Senate’s Secret Slush Funds
THIRTY-ONE YEARS AGO, A SECRET SLUSH FUND nearly ended the public career of Richard M. Nixon. The fund — which contained $18,235 — had been spent to supplement Nixon’s Senate allowances and to advance his national political prospects. Nixon, of course, salvaged his spot as the 1952 Republican vice presidential nominee by making one of the most famous political speeches in American history — the classic of televised bathos that became known as the Checkers Speech.
This year another California Senator, Democrat Alan Cranston, may find himself facing questions on the presidential campaign trail about his own secret political fund. In 1981 and 1982, Cranston transferred $66,000 in leftover campaign funds into a private checking account, using it, among other things, to pay for his wife’s travel and lodging, the services of speechwriters and a professional voice coach, and a wide variety of activities related to his fledgling presidential campaign. Cranston has never publicly accounted for his use of these funds. And although Internal Revenue Service rules clearly say such transfers from campaign accounts must be treated as money “diverted for the personal use of the officeholder,” Cranston’s office says he has never declared them as personal income on his tax returns, as the I.R.S. requires.
Cranston’s slush fund is the largest of its kind in the Senate, but it is not the only one. More than a dozen other Senators have channeled campaign contributions into their own checking accounts to pay expenses they are either unable or embarrassed to submit for official reimbursement — everything from softball shirts for their Senate staffs to airline travel for their children. In many of these cases, no one else — including the Federal Election Commission, the Senate Ethics and Rules Committees, and the public — knows how the money is spent.
Other Senators dip directly into their campaign treasuries as if they were personal slush funds. In the last two years, Senate incumbents have used campaign funds for bringing spouses along on taxpayer-financed junkets; salaries and consulting fees for relatives; family moving and living expenses; generous gifts and honorariums for Senate colleagues; lucrative contracts for firms in which employees and their relatives have financial interests; country club dues and automobile repair bills in the nation’s capital; and appliances, furniture, and art for their Senate offices.
Our examination of campaign spending reports filed with the F.E.C. by all one hundred Senate incumbents for 1981 and the first half of 1982, augmented by more than ninety interviews, shows that abuse of the system is widespread. In dozens of cases, Senate incumbents have ignored I.R.S. regulations, violated federal election law, and evaded standards for public disclosure and accountability. The tidal wave of money from political action committees has bloated the campaign treasuries of many Senate incumbents beyond any real need, creating reservoirs of ready cash that some have routinely used as a source of personal convenience and self-enrichment.
Contributors to political candidates presumably expect their money to be used for legitimate campaign expenses, not for supporting an incumbent’s lifestyle or enhancing his or her performance in office. But the wide-ranging abuses represent more than simple breaches of trust. They fuel the public’s longstanding suspicion that congressional incumbents view themselves as somehow above the law: a privileged class whose members are not obligated to obey the rules they have written for the rest of society.
THE SENATE ITSELF HAS ONLY ONE RULE regulating the use of campaign funds: “No contribution shall be converted to the personal use of any Member or former Member.” The Senate Ethics Committee, however, has never defined personal use. It so far has not decided, for example, whether to recommend punishment for Senator Harrison A. Williams, Jr., of New Jersey, who, as he resigned from the Senate following his Abscam conviction, took $65,781 in leftover campaign funds with him.
The Senate’s atmosphere of easy tolerance allows many incumbents to use campaign funds for meals, travel, and entertainment that have no discernible relationship to re-election. (Senate rules prohibit them from charging meals or entertainment of any kind to their official allowances.) And many use surplus campaign funds to subsidize the operations of their Senate offices in every manner imaginable — an investment in their own incumbencies that pays rich dividends at the polls, but blurs the distinction between public service and electioneering.
Some Senators seem to resent — and flatly refuse to answer — questions about how they spend campaign funds. And their official campaign spending reports frequently hide more than they disclose. Democrat Daniel Inouye of Hawaii, for example, raised only $7,875 in contributions in 1981 and 1982, but spent $168,322 (a $281,511 surplus at the end of his 1980 campaign enabled the deficit spending.) During this time, Inouye’s “campaign” had no headquarters, no telephone number, and no paid workers. After we asked for a complete itemization of $76,069 in credit card bills, the Inouye for U.S. Senate Committee filed amended disclosure reports with the F.E.C., which provide a partial picture of where the money went.
In 1981 and 1982, $63,843 in campaign funds went to eight different airlines. Inouye, for unexplained reasons, reimbursed his committee for $27,929 of it. The committee paid $17,043 for two automobiles, plus $5,582 for auto insurance and $1,954 for gasoline. Inouye’s wife received $4,720 in unitemized reimbursements. Substantial sums were spent in a small number of Washington-area restaurants: $1,980 at the Sakura Palace (twenty-one visits), $493 at the Far East Restaurant (nine visits), $350 at the Golden Palace (six visits), and $604 at Harvey’s (four visits). The Inouye committee also spent $4,309 at other restaurants and hotels, $592 on rented plants, $542 at art galleries, and $952 on tropical fish and aquarium supplies.
Like Inouye (who declined to be interviewed), many incumbents assume they have carte blanche in their use of campaign funds. Republican feremiah Denton of Alabama, for example, used $3,808 in surplus campaign money to move his family’s furnishings to Washington in 1981, plus another $1,500 to reimburse himself for “temporary living quarters.” The latter expenditure, the F.E.C. held in an identical case, violated federal election law. Denton also used leftover campaign money to pay for $13,090 in dues and entertainment at the Army Navy Country Club in suburban Washington , and $22,741in MasterCard bills for travel, meals, accommodations, and the like. After we requested an itemization of the credit card bills, Denton’s office stopped returning our phone calls.
Democrat Spark Matsunaga of Hawaii, reelected last year with 80 percent of the vote (the highest of any Senate candidate), regularly spends more campaign money in the Senate restaurant than any of his colleagues. His total tab in 1981 and 1982 was $29,330, or roughly $94 for every day the Senate was in session. “Sometimes we kid him about it, that he has too much,” says his press secretary, Elma Henderson. One week before Election Day, Matsunaga used campaign funds to buy himself an $11,549 automobile “for campaign, promotional, and constituent services.” Matsunaga’s committee also paid $318 a month in rent to Gladys Karr, a staff assistant, but his office would not say why.
The campaign committee of Republican Alfonse D’Amato of New York leases two Buicks at a cost of $880 a month; maintenance, insurance, and gasoline brought the total bill to $24,516 for 1981 and 1982 — four years before D’Amato’s name again may be on the ballot. During the same period, the D’Amato campaign made at least five payments, totaling $590, for automobile maintenance at an Arlington, Virginia, Buick dealership. D’Amato’s office refused to answer any questions about these and other expenditures.
Democrat John Glenn of Ohio ended his 1980 Senate re-election campaign with 71 percent of the vote and $125,550 in the bank. In the next year and a half, the Senator John Glenn Committee raised only $8,354; it spent $144,856, including $12,900 on Glenn’s twin-engine plane and another $24,952 for travel and entertainment bills paid through credit cards — all before Glenn was a presidential candidate. Included in the credit card statements shown to us were payments to an eclectic assortment of more than thirty Washington-area restaurants, including Le Lion d’Or, The Monocle, and the Prime Rib. The public, however, would have no way of knowing where the money went: the credit card payments are completely unitemized on Glenn’s campaign spending reports, in violation of F.E.C. disclosure regulations.
Reports filed by Republican Arlen Specter of Pennsylvania during 1981 and the first half of 1982 show that he spent about $1,000 in campaign money for European travel, plus another $7,007 in unitemized reimbursements to himself and $7,421 in unitemized credit card payments. How, exactly, was the money spent? “If you would want to come to Philadelphia, or send somebody,” committee treasurer Michael Baylson told us, “then you’re welcome to see all of our records.” When the invitation was accepted, however, the books of the Specter campaign suddenly closed.
Nepotism is a dirty word on Capitol Hill — federal law prohibits incumbents from placing relatives on their congressional payrolls — but it’s a different matter altogether on the campaign trail. Republican Paula Hawkins of Florida, for example, paid her son $18,125 in 1981 — the year after she was elected — for campaign bookkeeping and fundraising. The reelection committee of former Republican Senator S.I. Hayakawa of California paid his son the lump sum of $9,375 in February 1982 for “campaign management services.” Republican James McClure of Idaho used $1,000 in campaign funds in 1981 to pay his daughter-in-law for addressing and stuffing six thousand Christmas cards. Republican Frank Murkowski of Alaska and Democrat John Melcher of Montana also have hired their children as campaign workers. But the most imaginative twist may have been provided by Senator Specter, whose campaign paid Joan Specter’s Desserts, Inc., his wife’s baking business, $2,348 for “gifts.” Most of them went to Specter’s Senate colleagues.
Some incumbents channel campaign funds into their own businesses or businesses owned by Senate staff members and their relatives. Although this practice does not run afoul of Senate rules or federal election laws, it does create the appearance that Senators use their campaign treasuries to bestow profit on themselves and their friends. The reelection committee of Republican Steven Symms of ldaho, for instance, bought $3,011 worth of apples from the Symms Fruit Ranch. Democrat Dennis DeConcini of Arizona used $656 in campaign funds to rent a Tucson office from DeConcini-Gallo Properties, a family-owned real estate firm. Similarly, the campaign of Republican Mack Mattingly of Georgia paid the Stewart-Mattingly Partnership $225 in “storage fees.”
The most labyrinthine transactions of this kind can be found in the campaign spending reports of Republican Orrin Hatch of Utah. In 1981 his campaign made $15,900 in payments to Mac Haddow & Associates, a consulting firm incorporated in April 1980 by C. McClain Haddow (then Hatch’s Utah administrative assistant), Alice M. Haddow, and John L. Harmer. The corporation was involuntarily dissolved in 1982 by the state of Utah for failure to file an annual report.
In 1981 and early 1982, the Hatch campaign paid another firm, Mountain States Direct Mail, $71,813 for services ranging from word processing to billboards. That firm, incorporated by the Haddows and Harmer, also was involuntarily dissolved in 1982. Stan Parrish, Hatch’s administrative assistant, says that Mountain States Direct Mail later was “taken over” by a firm called Amerad, Inc., operating from the same address. Parrish should know: he was one of Amerad’s original incorporators, in January 1982. In 1982 Amerad received $28,220 in payments from the Hatch reelection committee; an Amerad subsidiary, Hurst and Associates, received another $144,487 in 1981 and 1982. Parrish explained the arrangement this way: “The situation is, Mac [Haddow] was paid a consulting fee for consulting to the campaign in ’80-’81. And he also had a company called Mountain States Direct Mail, which was taken over by Amerad, and Amerad had a branch called Hurst Advertising. And so that’s where that went.” When pressed for additional details, Parrish said: “I don’t understand the reason for talking about Haddow or Mountain States or Amerad.”
A final variation on the reward-your-friends theme comes courtesy of the reelection committee of Republican John Tower of Texas. In February 1982 the Tower Congressional Club paid four of Tower’s Republican Senate colleagues — Jeremiah Denton, Pete Domenici of New Mexico, Strom Thurmond of South Carolina, and John Warner of Virginia — $2,000 each for speaking at a dinner in Dallas. “He offered honoraria or campaign contributions,” says Terry Ware, a Tower press aide. “It was their own decision on which they wanted.” Warner accepted the fee as a political contribution. Denton, Domenici, and Thurmond apparently decided they needed the money more than their campaign treasuries.
Alan Cranston, the Democratic Party’s Senate whip and its earliest presidential candidate, has for more than two years maintained the modern-day equivalent of a Checkers fund: a private, unregulated checking account into which substantial sums of leftover campaign funds have been channeled and thus removed from the stream of public disclosure. Cranston transferred $30,000 in surplus campaign funds into the “Alan Cranston Office Account” in 1981, plus another $36,000 in 1982. The source of the money is not secret;| its ultimate destination, however, is.
Under the Federal Election Campaign Act and Senate rules, surplus campaign funds transferred into an office account must be used to defray expenses incurred by a Senator in connection with his or her official duties. (Payments for these official expenses also may be made directly from a campaign treasury, but there is a disadvantage in that method: who gets the money and why must then be disclosed.) Once campaign funds are transferred into an office account, however, neither the F.E.C. nor the Senate itself has authority to ensure the money is used for official — as opposed to political or campaign — purposes.
AS EARLY AS FEBRUARY 1982, and perhaps much sooner, Cranston’s office checkbook was being used to underwrite thousands of dollars in expenses for his presidential exploratory effort. Records of the Cranston Presidential Advisory Committee, Inc., show repayments to the Senate office account in 1982 for $4,292 in unspecified travel, mailing lists, photographs, gasoline, tolls, and postage. In essence, Cranston’s testing-the-waters committee was routinely borrowing money from his office account.
The financial shell game also shielded from public disclosure some expenditures that Cranston may have preferred to keep off the public record. His office account, for example, paid nearly $4,000 to Lilyan Wilder, a New York voice coach; hundreds of dollars in bills from the Senate restaurant; thousands of dollars for Mrs. Cranston’s travel all over the nation; shipping costs for copies of an Alan Cranston biography written by his sister; and a wide range of other expenses that arguably were connected not to Cranston’s official responsibilities but to his still-unannounced presidential campaign.
Cranston’s top aide, Roy Greenaway, refused to provide a complete accounting of expenditures made from the Senator’s office account, though he permitted limited inspection of some records. “We are not trying to avoid disclosure,” he says. “All we do is play by the rules.” Why not, then, make the records public? “We don’t want to be accused of grandstanding on this issue.” Cranston’s office declined to respond to repeated requests, by telephone and in writing, for an interview with the Senator.
The LR.S. ruled in 1980 that “excess campaign funds transferred to an officeholder’s office account are includable in the gross income of the officeholder for the year in which the funds are transferred.” The I.R.S.’s language could not be plainer. But Greenaway says Cranston did not declare as personal income the $30,000 in transfers to his office account in 1981. To avoid tax liability, he then would have been required to justify all expenditures from the account as his legitimate, tax-deductible business expenses as a U.S. Senator. Many apparently were not.
The theory guiding federal tax law for political committees and candidates is that money contributed to a political campaign should be used for campaigning — not for defraying an incumbent’s office expenses, for subsidizing a lavish lifestyle, or for any other diversions from campaign use. To maintain tax-exempt status, campaign funds must be spent to influence — or to try to influence — a candidate’s nomination or election to public office, as well as to pay for the related overhead, record-keeping, and fundraising expenses. The I.R.S. considers amounts spent for other, noncampaign purposes to be taxable income to the candidate on whose behalf the expenditures were made.
An example: Republican Robert Dole of Kansas, chairman of the Senate Finance Committee, used $15,480 in campaign funds in 1981 to pay the management-consulting firm of Arthur D. Little for an efficiency study of his Senate offices. Because the study had nothing to do with Dole’s reelection campaign, the diverted political funds represent taxable income to Dole himself. Dole might well have been able to justify and deduct the expenditure as an “ordinary and necessary” business expense connected with his Senate job, leaving him with no net tax liability. But Dole’s administrative assistant, JoAnne Coe, says he did not declare the amount as income in the first place.
I.R.S. regulations treat surplus campaign funds even more strictly. Unless they are transferred within a “reasonable period of time” to another political organization or charitable group, or are “held in reasonable anticipation” of being spent to influence future elections, the I.R.S. treats the money “as expended for the personal use of the person having control over the ultimate use of such funds” — namely, the Senator. And, as in Cranston’s case, surplus campaign funds transferred directly into an office account become personal, taxable income.
What exactly is wrong with the actions of these Senators? Defending his 1952 slush fund in the Checkers Speech, Richard Nixon argued that the fund “was used to pay for political expenses that I did not think should be charged to the taxpayers of the United States.” On that point, Nixon may have been right. Similarly, there is nothing wrong per se with using campaign contributions to pay for things like voice coaches. What is unquestionably wrong is for Cranston, Dole, and dozens of other Senators — whether through inadvertence or design — to ignore the tax laws, no matter how burdensome, annoying, or even pointless those laws may seem. Ordinary citizens do not have the luxury of disregarding the tax code because they disagree with it, don’t understand it, or deem themselves beyond its reach. And if Senators believe there is something wrong with I.R.S. rules and regulations, they shouldn’t evade them, they should change them — which, unlike ordinary citizens, they are in a position to do.
SOME INCUMBENTS CONSIDER THE MATTER nobody’s business but their own. Democrat Lloyd Bentsen of Texas diverted $32,884 from his campaign treasury in 1981 and 1982 to pay his bills
in the Senate recording studios, which, under Senate rules, may not be used for political or campaign purposes. In other words, he diverted campaign funds for noncampaign use. Did Bentsen declare the recording studio expenditures — the largest of any incumbent — as personal income? “Senator Bentsen fully complies with our tax laws,” says Jack Devore, his press secretary. “However, he is not going to get involved in a public discussion about specific items on his tax returns.” And would the recording studio payments qualify as legitimate and deductible expenses incurred by Bentsen in his work as a U.S. Senator? An examination of campaign records suggests these expenditures had less to do with Bentsen’s official duties than with his hard-fought race for reelection in 1982. Bentsen spent only $107 in campaign funds in the Senate recording studios in 1979, but he spent $12,790 in 1980 and $23,960 in 1981.
Senate incumbents have no trouble raising money. At the end of 1981, the collective surplus of Senate incumbents was in excess of $15 million, much of it raised in non-election years from PACs with a stake in Senate business. The Senate is so awash in money that many of its safest incumbents have campaign surpluses of hundreds of thousands of dollars, and sometimes much more. Democrat Henry lackson of Washington, for example, who won in 1982 with 69 percent of the vote, had more than three-quarters of a million dollars in the bank — after his reelection. So much money flows to incumbents, in fact, that many don’t even bother to save what they have for future campaigns. Some waste money contributed in good faith by their supporters on expenses they had no need to incur in the first place. Still others use campaign contributions for government business, underwriting official Senate expenses their employers — the nation’s taxpayers — have indicated in public opinion polls they would rather pay.
More than half the members of the Senate, for example, routinely spent campaign funds in the Senate recording and photographic studios during 1981 and the first half of 1982, including Republican John Danforth of Missouri ($13,169), Republican Charles Grassley of Iowa ($12,772), Democrat Ernest Hollings of South Carolina ($20,451), and Democrat Sam Nunn of Georgia ($13,035). The studios, with their bargain-basement rates, are of course reserved for Senators only, which gives incumbents a decided financial and strategic advantage over announced or would-be challengers.
Others gain a competitive edge by using campaign funds to expand their Senate telephone service. When constituents of Paula Hawkins call her Senate offices toll-free on a special WATS line, they probably are unaware that PACs and other campaign contributors are paying for the call. In 1981 and 1982 the Hawkins campaign used at least $15,615 of contributors’ money to defray her Senate telephone bills. And Hawkins is only one of dozens.
OTHER EXPENDITURES CLEARLY ILLUSTRATE that many Senate political treasuries are in fact slush funds. Frank Murkowski, for example, used more than $3,000 in funds left over from his 1980 campaign to bring his wife along on a Korean trip. Other incumbents have used campaign money to pay for everything from donations to the Washington Opera (Democrat Patrick Leahy of Vermont) to wedding gifts for Senate staff members (Democrat James Exon of Nebraska). Leahy also used $6,284 in unneeded campaign funds in 1981 to finance a retreat for his Senate staff in Williamsburg, Virginia. Similarly, Republican Bob Packwood of Oregon used at least $5,113 in campaign funds in 1981 to pay for a weekend for his staff at a Berkeley Springs, West Virginia, resort.
Why would Packwood’s campaign committee finance such a retreat? “l think the way to phrase the question ,” says Etta Fielek, his press secretary, is that “it’s not something the campaign would do — it’s something the campaign can do.”
THE BIGGEST SLUSH FUND OF ALL, one whose gargantuan size renders it virtually impossible to trace all its beneficiaries, is run by the National Republican Senatorial Committee. During 1981 and the first half of 1982, the committee spent more than $28 million, an astonishing sum considering that it contributed only $467,349 to federal candidates and political committees. More astonishing, however, is the committee’s artful exploitation of the loophole in Senate rules that permits funds derived from political committees to be used to defray an incumbent’s official expenses. By law, the National Republican Senatorial Committee may contribute no more than $17,500 to an individual candidate. But that ceiling did not prevent the committee from subsidizing the operations of the U.S. Senate (Republicans only, of course) by at least $760,000 in 1981 and the first half of 1982. By submitting their bills for official expenses directly to this campaign committee, more than fifty Republican Senators have vastly expanded the scope of activities their Senate allowances permit.
Republican Senators submitted an amazing variety of bills to the National Republican Senatorial Committee for payment in 1981 and the first half of 1982. Here is a sampling: Bob Packwood of Oregon, at that time the committee’s own chairman, at least $2,633 in carpeting, furnishings, plants, and other amenities for his Senate offices; John Tower, a $500 set of the Encyclopaedia Britannica; Alan Simpson of Wyoming, a $200 enrollment fee for a Dale Carnegie course; Gordon Humphrey of New Hampshire, $7,394 for leasing an automobile and $718 for insuring it; Slade Gorton of Washington, $2,166 for office furniture and furnishings; Frank Murkowski, $118 for Fostoria glass and $15 for dues in the National Rifle Association; and Alfonse D’Amato, $4,786 for camera, audio, and video equipment. D’Amato, in fact, submitted more than $25,000 in bills for payment.
The committee’s spending reports make it difficult to determine on whose behalf many of its expenditures are made. But the scope of those expenditures is startling: in the first six months of 1982, for example, it spent more than $1.1 million on flags. In addition, during 1981 and the first half of 1982, the fifty-three Republican Senators collectively submitted to the committee $173,759 in bills at the Senate recording and photographic studios; $3,780 in tabs at the Senate restaurant; $143,144 in travel; $94,449 for subscriptions (at least 1,250 of them, including Photographic Trade News for Majority Leader Howard Baker); $28,698 in telephone bills; $49,091 in clipping services; and at least $268,570 more for expenses ranging from rented office plants to videotape and communications systems.
The largest individual beneficiaries of the Republican committee’s subsidies in particular categories during this period were John Danforth, $12,776 in recording-studio bills; Strom Thurmond, $6,052 in photographic studio bills; Paula Hawkins, $18,455 in travel; Roger Jepsen of Iowa, $4,497 in subscriptions; Charles Mathias of Maryland, $6,881 in clipping services; and Mark Hatfield of Oregon, $6,273 in telephone bills.
The Republican committee also has allowed full-time Senate staffers to supplement their earnings substantially by moonlighting. In the first half of 1982, for example, Mitchell E. Daniels, Jr., then administrative assistant to Richard Lugar of Indiana, received $16,264 for “political consulting” and expenses; at the same time, as Lugar’s highest paid staffer, he was earning up to $59,000 a year. During the same period, the committee also retained Dennis Howe, administrative assistant to Robert Kasten, as a political consultant. He collected $24,138 in fees and reimbursements from the Republican committee while earning an annual Senate salary of up to $56,500. The Senate has no rule limiting how much full-time Senate staffers can collect in outside earnings.
AS INGENIOUS AS THIS GRAND SCHEME IS, it has two major flaws. First, the Republican committee has unwittingly given its Senate members potential tax problems. Those Senators must, under I.R.S. regulations, report all noncampaign expenditures made on their behalf as personal income. Then, to avoid tax liability, they must justify the expenditures as legitimate business expenses. Second, an argument can be made that the National Republican Senatorial Committee should not be considered a tax-exempt political organization at all. While the Federal Election Commission has no jurisdiction in the matter, the I.R.S. does. Its rules say that a campaign committee’s principal purpose must be to influence elections. If more than an insubstantial amount of its resources are spent for noncampaign purposes — clearly the case with the Republican committee — its tax-exempt status can be challenged on the grounds that it is not operating primarily for campaign purposes. Furthermore, under these circumstances, the I.R.S. might even try to disallow the credits taken by campaign contributors on their tax returns.
These tax issues are important because, once again, they raise the question of whether Senators are abiding by the rules they impose on others. But the activities of the National Republican Senatorial Committee raise an even more important question: do Americans want their national legislature subsidized by private, partisan interests?
Last year Democratic Senator William Proxmire of Wisconsin won reelection with nearly 54 percent of the vote. He spent $145 in the process, every dime of it from his own pocket. Proxmire refused all contributions. “It’s such a miserable business to go around asking for money,” he says. “They don’t contribute because they like the color of your eyes. They contribute because they want you to be obligated to them.” But most Senators are unable or unwilling to do it Proxmire’s way. They raise money year in and year out, election time or not, accumulating surpluses that become easy substitutes for slush funds. Sometimes the numbers themselves are the best illustration of what’s going on: in the first six months of 1982, Ernest Hollings raised $30 and spent $15,115; Republican William Armstrong of Colorado raised $641 and spent $19,759; and Robert Kasten raised $10 and spent $12,533.
In March 1977 Adlai E. Stevenson III of lllinois, then chairman of the Senate Ethics Committee, earned the enmity of many of his colleagues when he tried to close the slush-fund loophole in Senate rules by creating a wall between official and campaign expenses. He told them: “The purpose of this amendment is to get rid of every last slush fund, from now until doomsday, in the U.S. Senate. When that moment comes, there will be no more Checkers funds, no more slush funds, no more tin cups for oil companies and special interests who wish to defray the expenses of Senators.” As he had predicted beforehand, however, that moment never came: the Senate rejected Stevenson’s amendment.
For a short time, the F.E.C. required public disclosure of financial activity in the unofficial office accounts known as slush funds. In 1977 the House of Representatives abolished slush funds entirely, rendering public disclosure moot. The Senate abolished them, too, with this language: “No member may maintain or have maintained for his use an unofficial office account.” Then, in an uncanny display of backdoor logic, it added — and later widened — the loophole Stevenson fought: “An unofficial office account does not include . . . funds derived from a political committee.” In the six years since, Senate incumbents have grown much craftier in learning how to exploit that loophole. But because no one has the authority to monitor the slush funds, the issue has lain dormant while the potential for abuse has vastly expanded.
THE SENATE PROBABLY WILL NOT ACT until prodded, simply because too many incumbents benefit — personally and politically — under the current system. Until their constituents realize that special-interest PACs and other wealthy contributors are underwriting the costs of Senate business — thereby destroying the distinction between politics and government — there is likely to be little outrage. The biggest fraud of all, however, undoubtedly is perpetrated by some Senators themselves, who go to potential campaign contributors — PACs included — lamenting the cost of modern political campaigns, when their real problem isn’t expensive campaigns but expensive lifestyles.
Fifteen years ago a special Senate Committee on Standards and Conduct noted: “A Senator is extended an extraordinary measure of trust and confidence not given to ordinary members of society. The Senate must therefore require higher standards of conduct than those generally required in the marketplace.” If anything, many Senate incumbents have demonstrated that their special society operates under its own set of rules. And the public seems to have become numb to it. A final, disturbing, question: if Richard Nixon were in the Senate today, would his $18,235 slush fund have bothered anyone?
The authors [Bill Hogan, Diane Kiesel, and Alan Green] write for The City Desk, a Washington bureau for city and regional magazines. Their article on House slush funds (“The New Slush Fund Scandal,” TNR, August 30, 1982) was awarded the 1982 Worth Bingham Prize. Research for this article was supported by a grant from The Fund for Investigative Journalism.
This article originally appeared in the June 20, 1983, issue of The New Republic.
Bill Hogan