Forget everything you think you know about money in politics. The system is not broken. Sure, a few loopholes need to be closed to prevent violation of existing election laws (e.g., foreign money should not be financing U.S. political campaigns), but the current elections system and the level of money involved are not harming our democratic process. At least, such is the world according to Sen. Mitch McConnell, aka “the Darth Vader of campaign finance reform.”
A firm believer in the Supreme Court’s ruling that, in this country, money equals speech and must be protected as such, the junior senator from Kentucky has appointed himself protector-in-chief of the current fundraising system. He argues that, if anything, Congress should raise the existing contribution limits to get even more “speech” into the election process. Pooh-poohing concerns over the outrageous amount already spent on campaigns, McConnell has, at various times, compared election spending to the price of yogurt, bubble gum, and McDonald’s extra value meals. As for the undue influence such contributions provide special interest groups, Senator McConnell insists that legislators are above contamination by financial matters. As he told the National Press Club in March, “I think it is absurd on its face to make the suggestion that members are selling votes given the fact that the Supreme Court sanctioned limits on individual contributions and limits on PAC contributions.” In other words, no self-respecting legislator would sell his or her soul for a measly $5,000 PAC donation. (For what dollar amount a legislator might consider selling his soul, McConnell does not say.)
Self-righteously cloaked in the First Amendment, McConnell has waged a high-profile battle against campaign finance reform. But unlike many of his colleagues, he is neither embarrassed nor apologetic about his commitment to the status quo. After leading a filibuster in the 103rd Congress against legislation advocating voluntary spending limits, public financing (which he disparages as “food stamps for politicians”), and lower limits on PAC contributions, McConnell declared the bill’s failure “a victory for the Constitution.” The proposed measure was, he said, “the kind of bill that gives gridlock a good name.” Last year, with his party in the congressional driver’s seat, McConnell had even less trouble killing reforms championed by Sens. John McCain and Russ Feingold. And as this year’s Senate hearings on Bill and Al’s campaign shenanigans goaded some 70 legislators into introducing their own reform bills, McConnell has amassed an unlikely cadre of anti-reform interests, ranging from the ACLU to the Christian Coalition, to lobby against any effort to slow the flow of money into the system. Not that McConnell has much to fear. As head of the National Republican Senatorial Committee (i.e., the guy in charge of fundraising), McConnell is unlikely to be crossed on this issue by any GOP senator looking to be in his good graces come re-election time—a fact of which McConnell is well aware. In February, National Journal reported that McConnell had already summoned several of the Republican senators facing re-election this November to his office for a chat about his desire to block McCain-Feingold again this session.
But make no mistake, we’re not just talking about campaign money here. Although election funding is McConnell’s passion, his faith in the better angels of politicians’ natures extends to the way successful candidates, once in office, interact with lobbyists and other petitioners. In 1994, he lobbied hard against the Senate proposal to bar legislators from accepting gifts, meals, travel, etc. from lobbyists. The bill ultimately passed, despite McConnell’s heroic efforts—and with- out the substitute amendment he co-sponsored that would have weakened the reform, retaining many of the tasty perks legislators could accept.The state senator assured Vaughan that his problems weren’t anything that couldn’t be fixed—for a hundred grand.
Now, admittedly, different people have different opinions of human nature, and it may be that Mitch McConnell is a political Pollyanna. After all, it does seem cynical to assume that, just because a PAC contributes heavily to a particular party or a chummy lobbyist offers to spring for a few three-martini lunches, a politician would take a special interest in said contributor or lobbyist. It is entirely possible that, in Senator McConnell’s experience, money has never proven to be much of a corrupting influence in politics.
Hear that? It’s the entire population of Kentucky laughing hysterically. Whatever his experience in Washington, Mitch McConnell surely has not so lost touch with his constituency that he has forgotten that, right around the time he was battling for election to his second term in the Senate, his home state was split wide open by one of the most outrageous political scandals of the decade.
Operation BOPTROT, as the attendant FBI investigation became known (for reasons to be explained later), began in 1990 when a disgruntled businessman complained to the feds that Kentucky lawmakers were taking money from horse racing interests in exchange for legislative favors. The case generated little national press, but when it was finally closed—five years and 21 indictments later-15 former and sitting Kentucky legislators had been snared, along with the governor’s nephew, the state’s top lobbyist, and the Jockeys’ Guild. Charges ranged from extortion to racketeering to lying to the FBI. Some of the legislators involved had accepted campaign contributions in exchange for their influence, others had stooped to pocketing the cash outright. What all had in common was a willingness to put the desires of moneyed special interests above the public interest. And in all but a few cases, the sums in question were well below the level Senator McConnell dismisses as negligible in today’s debate. Perhaps, as McConnell gears up to derail the latest push for political reform, a brief stroll down memory lane would help him recall just how little special interest cash is actually required to corrupt the system.
Let the Games Begin
It all started with a phone call.
On the afternoon of September 23, 1990, Kentucky Senate Majority Whip Helen Garrett dialed up Mr. M.L.
Vaughan, the president and principal owner of Riverside Downs, a horse racing track located in the small north- west Kentucky town of Henderson. Far from a Sunday social call, the conversation focused on Vaughan’s concerns that a 1988 state law was unfairly favoring a rival track at Riverside’s expense. Horse racing is big business in Kentucky; and when racing folks talk, legislators usually listen. But having unsuccessfully petitioned, picketed, and filed suit against the general assembly to repeal the objectionable law—which even the state attorney general opposed as unconstitutional—Vaughan had begun to feel as if Kentucky lawmakers suffered from selective deafness where he was concerned.
After 11 years in the legislature, however, Sen. Helen Garrett knew how the system worked: A little financial incentive was often required to activate lawmakers’ hearing. Garrett assured Vaughan that, although vexing, his problems weren’t anything that couldn’t be fixed—for a hundred grand. Not all of it would go to her, of course. As Vaughan later recalled, Garrett explained the various interests that would expect a share of the proceeds: $30,000 for the House, $40,000 for the Senate, and so on. It seems that, having been defeated in the May Democratic primary, Senator Garrett had plans to become a lobbyist when her term expired in December. But with the right incentive, she told Vaughan, Garrett would launch her lobbying career a bit early and champion the legislative changes Vaughan desired.
The suggestion that his business problems stemmed from a failure to grease the right palms did not sit well with Vaughan. The Florida insurance executive had taken a risk by sinking his money into a harness track—also known as a sulky track for the small, two-wheeled carriages, or sulkies, pulled during races. Harness racing doesn’t enjoy the prominence—or the financial success—of thoroughbred racing, and not surprisingly, Riverside was struggling to compete with nearby thoroughbred track Ellis Park. Compounding Vaughan’s problems, however, was the 1988 law granting Ellis Park first rights to all races simulcast in Henderson County. Simulcasting is the life blood of smaller race tracks in Kentucky, allowing them to televise and to conduct off-track betting on races occurring elsewhere in the state or nation. Simulcast dates, like live racing dates, are granted to individual tracks by the state racing commission. In areas where multiple tracks operated, the policy had traditionally been to split simulcast dates between the facilities. With the 1988 bill cutting Riverside out of the game, Vaughan’s track was sliding steadily toward bankruptcy.
Frustrated over his futile attempts to change the law and unwilling to pay Garrett’s recommended “fee,” Vaughan contacted the FBI. In a flash, federal agents were swarming around his office, outlining plans for an investigation of corruption in the Kentucky legislature. When Vaughan made his return call to Garrett, the FBI was listening in. Reconsidering her earlier $100,000 estimate, Garrett said all she really needed was $2,000 in lobbying fees to take up Vaughan’s cause. The FBI provided the funds, Vaughan wrote the check, and operation BOPTROT was off and running.
The FBI’s original target was the general assembly’s Business, Organization, and Professions Committees (the BOP in BOPTROT), which oversaw state laws regulating horse racing (the trot in BOPTROT). Kentucky racing interests were famous for their political largess, not only for the tens of thousand of dollars they contributed come election time but also for the lobbying perks they lavished on legislators. It’s hardly surprising then that BOP Committee members took an active interest in state racing issues. In addition to the endless schmoozing that went on around the capital city of Frankfort, legislators would travel with racing representatives to industry conventions in Las Vegas, Arizona, and Florida. In February of 1988, for example, four lobbyists and seven lawmakers (along with the occasional girlfriend) jetted to Pomona Beach, Fla., for a Valentine’s weekend filled with food, fun, and, of course, horse racing at the Pomona Park track. And just to ensure no one got lost while hopping from one party to the next, Ellis Park owner Roger Kumar thoughtfully provided limo service for the group during its stay. (By a happy coincidence, the following month, BOP Committee members drafted the controversial simulcasting bill that so benefited Ellis Park.)
Such out-of-town junkets gave racing representatives an invaluable opportunity to develop close working relationships with their legislative overseers—a situation of keen interest to federal investigators. Sure enough, when Vaughan, at the FBI’s behest, approached outgoing Sen. John Hall about Riverside’s troubles, the BOP Committee vice chairman encouraged Vaughan to attend a few industry conventions and get to know the other committee members. According to the (Louisville) Courier Journal, Hall instructed, “You need to go out there and wine ’em and dine ’em and give ’em a couple hundred dollars apiece”
That December, at the annual Jockeys’ Guild blowout in Vegas, Senator Hall went to work unofficially for Vaughan—and the FBI went to work on Hall. While hobnobbing with BOP Committee members at the craps tables and the private parties, FBI operatives posing as Riverside representatives passed a number of bribes to legislators, ostensibly in return for help in blocking a “breed-to-breed” bill that would ban state harness tracks from simulcasting thoroughbred races. Hall accepted $4,850 from an operative, the majority of which he claims to have passed to other legislators. At least two House BOP Committee members accepted money as well—although they sold out for the bargain price of $400 each. (A dollar amount considerably below the $5,000 figure Mitch McConnell dismisses as a temptation.)
In early 1991 the FBI decided to “flip” John Hall, who had slipped smoothly from the Senate into the world of racing lobbyists. Summoned to a Louisville office building one day under the pretense of a meeting with Riverside officials, Hall found himself surrounded by FBI agents and members of the U.S. attorneys office, as well as surveillance photos, video tapes, and filing cabinets containing information on him and his family. Confronted with evidence that he had pocketed bribe money, Hall was given a choice: cooperate with the investigation or spend the next few decades in prison. Hall went with option A.
Despite the FBI’s best efforts, however, Hall proved a flop in his attempts to draw former colleagues into investigators’ nets. By mere chance, however, he became involved in snagging two of Operation BOPTROT’s slipperiest fish: William McBee, a former BOP Committee chairman turned lobbyist, and John W. “Jay” Spurrier III, a member of the state harness racing comm mission and the capo of Kentucky lobbying (not to mention a close chum of disgraced U.S. Rep. Dan Rostenkowski). Hall, who worked with the two men on lobbying issues, was invited to help in their plans to fix an arbitration dispute for Riverside in exchange for a $50,000 payoff from the track. The details of the caper, as reported by local journalists such as Tom Loftus of the Courier Journal, read like something out of a bad spy flick: Hall would handle the actual exchange of money, then cover the shady dealings by reporting the $50,000 to the IRS as lobbying income. In return for his troubles, he could keep $20,000 of the cash. The rest would be split between Spurrier, McBee, and Bruce Wilkinson, the nephew of then-Gov. Wallace Wilkinson and the governor’s official adviser for the appointment of an arbitrator ‘to Riverside’s case. The FBI was ecstatic. The day of the payoff, agents wired Hall’s briefcase with tracking and listening devices, then stuffed it full of cash—$30,000 worth of twenties that had been meticulously counted, photocopied, and dusted with fluorescent powder. Hall then headed out to meet McBee at Flynn’s restaurant and bar, the official hangout of every legislator and lobbyist in Frankfort.The legislator insisted he had always intended to return the illegal contribution—it had simply slipped his mind.
Hall received instructions to leave the money in room 418 of the Holiday Inn Capital Plaza. Hall later recalled that, on the drive to and while inside the hotel, he was totally convinced he was about to be killed. After searching the room to make sure he was alone, Hall abandoned his cargo and high-tailed it out of the hotel. Spurrier, who’d been hiding in the next room, then lugged the payoff money back to his condo. There, he and Bruce Wilkinson counted out their shares, for the listening pleasure of an FBI surveillance team. When the men exited the building, Spurrier was tailed and later confronted by investigators. Like Hall, he was less than thrilled by the prospect of acquiring intimate knowledge of the federal prison system. Instead, Spurrier too accepted the FBI’s invitation to join the team.
With the state’s most trusted lobbyist onboard, BOPTROT’s ripples began to spread. Spurrier continued working with McBee on behalf of Riverside Downs, encouraging lawmakers to kill the breed-to-breed bill. To this end, McBee doled out $1,000 incentives to selected legislators, including $2,000 to his successor as House BOP chairman. The FBI also videotaped McBee slipping longtime House Speaker Don Blandford a “thank you” $500 for the speaker’s help in blocking the bill (which was never actually introduced during the session). The speaker’s reaction to the gift: “Well bless your heart.”
On March 30, 1992, the FBI overplayed its hand when it attempted to flip Bill McBee. The stunned lobbyist initially agreed to investigators’ terms but later that night, deciding he couldn’t incriminate his friends and colleagues, leaked the news to a couple of people at a party honoring him as Kentucky’s Lobbyist of the Year. With its cover blown, the FBI decided to go public. On March 31, the next-to-last day of the legislative session, federal agents descended onto the floor of the state capitol, interviewing legislators and handing out subpoenas for travel and campaign finance records. The undercover phase of BOPTROT was officially over.
The Bigger Picture
Lest horse racing come across as a uniquely corrupting force in this story, it bears mentioning that investigators uncovered monkey business throughout the legislature. For instance, two senators pleaded guilty to accepting illegal campaign contributions from lobbyists for Humana Inc. in exchange for their votes on a bill favored by the health-care giant. (One of the senators insisted he had always intended to return the contribution but that it had simply slipped his mind.) Similarly, a member of the Senate Banking Committee was convicted of conspiracy and attempted extortion for trying to recoup money he said had been promised him for his vote on a 1984 bill loos- ening state banking regulations. The senator was caught on tape announcing to his alleged co-conspirators, “By God … I need me a little grubstake.”
Indeed, the corruption in the BOP Committees (subsequently renamed the Licensing and Occupations Committees) seems to have been more the rule than the exception. The problem wasn’t with any particular group of lawmakers or lobbyists so much as with the entire system. “It got to be considered just fine for the lobbyists and special interests to wine and dine members of the legislature,” says Richard Beliles, the chairman of Kentucky Common Cause and head of the state’s League of Women Voters. The various PACs had sunk huge amounts of money into the state campaign coffers over the years, notes Beliles, and “this whole [scandal] was about the dominance of money both in getting elected and then in getting the perks while you were in office?”
In the pre-BOPTROT days, confirms Rep. Joe Clarke, the 27-year House veteran who succeeded Don Blandford as speaker following Blandford’s indictment, lawmakers and lobbyists were practically living together in some cases, staying up all night playing cards in an atmosphere that resembled nothing so much as a college fraternity. Before tough ethics restrictions were passed in 1993, recalls Clarke, “legislators didn’t have to pay for meals at all. There were two or three big parties every night [hosted by lobbying groups]. You could eat and drink more than you could ever dream of.” Food, it seems, was an important part of the culture. At Flynn’s restaurant and bar, lobbyists set up tabs and gave the management standing instructions to put legislators’ meals on their tickets. “I had to quit going over there,” recalls Clarke, “because you’d go eat your dinner or lunch, and owner Pete Flynn would come over and say, ‘That’s already been paid for.”‘ Nor were perks restricted to outside of the office. “There was always food in the House leadership offices,” says Clarke, “and everybody knew the speaker wasn’t buying the stuff. Lobbyists would bring in a big ham—Nobody thought anything of it?”
Beliles confirms that such practices were everyday occurrences and legislators would have been offend- ed at the suggestion they were doing anything improper. In fact, even after his fall from grace, Don Blandford maintained that he and his fellow indictees had done nothing wrong. In an interview from prison with NBC’s Tom Brokaw, Blandford asserted, “There’s nothing in the world wrong … with a lobbyist giving gifts to legislators. It’s done daily. … And gifts are something that’s a way of life?”
Certainly, says Beliles, “many legislators took advantage of the situation but didn’t do anything wrong. But gradually, legislators’ loyalties went through a transformation and were transferred from the public interest and constituents to these special interests.”
Even today, says state Rep. Tom Riner, most legislators don’t believe that colleagues snared in the sting did anything wrong. “There’s no real sense of contri- tion among members,” says Riner. “There’s more a sense that, ‘Well, we’re sorry the guys got caught and gave the rest of us a black eye.’ They see it as a terrible situation, but from the standpoint of a public relations problem?’
Kentucky residents, of course, viewed the problem differently. The public outcry immediately following BOPTROT drove legislators to pass sweeping campaign finance and ethics reforms. But as public pressure begins to subside, nostalgia for the good of days has legislators chipping away at the reforms. For example, the independent commission established in 1993 to investigate ethics complaints was effectively defanged during a subsequent session, with legislators taking back the power to appoint commission members themselves. Meanwhile, the contribution limits established by the campaign finance reforms were essentially quadrupled in this past session, reports liner. “The legislature is becoming more and more friendly to lobbyists and to special interests,” he adds sadly, “and I think we’re sending a loud message to those groups that we’re back in business?’
Of course, fluid dealings between legislators and lobbyists are not unique to the Bluegrass state, and the harmful effects of special interest money on government can be observed everywhere from Sacramento to Austin to Washington, D.C. The names, dates, and down-home particulars of the situation may change, but the lesson remains the same: Money and politics don’t mix. Despite what Mitch McConnell might have us believe, the idea that big money—and some- times even small money—can corrupt our democratic process is not alarmist hogwash. And the desire to overhaul the current system, is not, as Senator McConnell has so patriotically put it, “some liberal trying to take away your First Amendment right to free speech.” Until we reject this absurd notion that money in politics is not only acceptable but desirable, legislators will continue to subordinate the best inter- ests of their constituencies to their own career goals (i.e., the best interests of major funders). Moreover, until the public gets angry enough to force lawmakers to fundamentally and permanently change the system, and the underlying culture, we shouldn’t expect much improvement. And our nation’s government will remain hostage to the vicious cycle of money in politics that plagues state and federal, Republican and Democratic, incumbent and insurgent politicians alike.