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Robert Krulwich looks into the expected flow of cash into the 1996 presidential campaigns and the interests of those who donate the money.

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00:00:00The Democracy Project

00:00:08The more I needed, the less you gave

00:00:24Last week in Washington, Republicans gathered

00:00:29for the biggest political party fundraiser in history.

00:00:34Together, we have raised $16.3 million

00:00:39to elect Republican candidates.

00:00:42How much does it cost to get a seat at the political table?

00:00:47Tonight on Frontline...

00:00:48What determines who gets which seat?

00:00:50A whole lot of money.

00:00:51A whole lot of money?

00:00:52So you want to buy a president.

00:00:53You pay the money, you get the access.

00:00:55Sleazy, frankly.

00:00:56Buy a what?

00:00:57$400,000.

00:00:58Buy a president.

00:00:59It's a national disgrace.

00:01:00You get the access, you're in the game.

00:01:02Who's buying presidential favors?

00:01:04Fat cats.

00:01:05Buying influence.

00:01:06He gives to both sides.

00:01:07The bottom line here is raising money.

00:01:08Shiverside wins, right?

00:01:10Tonight, correspondent Robert Kralwich

00:01:12examines the big business of campaign finance.

00:01:15So you want to buy a president.

00:01:16Funding for Frontline is provided by the Corporation for Public Broadcasting

00:01:24and by annual financial support from viewers like you.

00:01:30This is Frontline.

00:01:41Additional funding for this program was provided by the Florence and John Schuman Foundation

00:01:45and by the John D. and Catherine T. MacArthur Foundation.

00:01:54Sir, what do you do for a living?

00:01:56I know I should know.

00:01:57Some of you might have missed this on television this fall.

00:01:59It was a prime time broadcast of a gala fundraiser from Ford's Theater,

00:02:04the place where Lincoln was shot.

00:02:05And in the front row was the president of the United States.

00:02:09And up on the stage was the comedian Paula Poundstone.

00:02:12And she was trying to figure out who gets to sit next to the president.

00:02:18What determines who gets which seat?

00:02:19Do you do the whole seating chart?

00:02:22Do you know the guy behind your head?

00:02:24Very well.

00:02:25Who is that?

00:02:25Carl Linder.

00:02:28Carl Linder.

00:02:29I'm sorry.

00:02:30I'm not familiar.

00:02:30Do you?

00:02:33What?

00:02:34All right.

00:02:34What made you give him that seat?

00:02:35That'll tell us who it is.

00:02:37A whole lot of money.

00:02:39A whole lot of money?

00:02:43Carl.

00:02:44I'm sure it was much deeper than that, sir.

00:02:47It was money and love, little buddy.

00:02:49Don't you worry.

00:02:53What's Carl's role in the community?

00:02:54Carl, why do you have so much money?

00:02:57Is that rude to ask?

00:03:04Sir, what do you do for a living?

00:03:06I know I should know, but since I don't know, would you tell me?

00:03:08Mr. President, do you know who Carl Linder is?

00:03:16Would you mind telling me?

00:03:20It's a secret.

00:03:21It's a secret?

00:03:28He's in bananas, sort of like you are.

00:03:30He's in bananas?

00:03:31Is that true, sir?

00:03:32He what?

00:03:36You're the Chiquita banana guy?

00:03:39Gee, sir, without the fruit on your head, I don't even recognize you.

00:03:45Is that true?

00:03:53Why does the president know the banana guy?

00:03:59Now, there is an interesting question.

00:04:02Why does the president know the banana guy?

00:04:06Well, Carl Linder is a big supporter of Ford's Theater, which is why he was there.

00:04:09But before he was the banana guy, Carl Linder was an ice cream guy.

00:04:15He dropped out of high school at 14 to work in his dad's dairy store in Cincinnati.

00:04:22Now, 55 years later, he's built the business into a 200-store chain, United Dairy Farms.

00:04:28Carl Linder, you should pardon the expression, is a big banana in Cincinnati.

00:04:33Besides the convenience stores, he runs an insurance company, a bank, a local TV station, and Chiquita bananas.

00:04:40And he is part owner with friend Marge Schott of the Cincinnati Reds.

00:04:45I guess the thing that fascinates me the most about Carl is he was a self-made man.

00:04:50He knows how to deal.

00:04:51He's a wheeler dealer.

00:04:52And you see this white Rolls Royce going down the road, and there he'll be driving with his phone up.

00:05:00And on the phone, he has raised lots of money for presidents.

00:05:04He collected $106,000 for President Bush's two campaigns.

00:05:08And before that, he lined up support for a little-known candidate.

00:05:12Carl called me, and he says, you want to have breakfast with a guy who's going to run for president?

00:05:17A little guy from Georgia.

00:05:18And he says, it costs about $5,000 apiece.

00:05:20I said, all right.

00:05:21I remember Carl saying to Jim Carter,

00:05:26Jimmy, you and I have something in common these other guys don't have in the room here.

00:05:30He says, this room is filled with Catholics and Jews.

00:05:32And he says, you and I are the only two Baptists.

00:05:35Linder's never wanted to be a candidate.

00:05:37I don't think he's ever been interested in running for anything.

00:05:40Of course, he doesn't have to run.

00:05:41He's got his other guys running for him.

00:05:48These days, he has thousands of people working for him.

00:05:51And every year, he invites almost all of them down to a Christmas party downtown.

00:05:56It is a gala affair.

00:05:58He always brings in a well-known celebrity.

00:06:02This year, it's Andy Williams, and he's bringing in his Christmas show.

00:06:04My guess is, yes, he'd be up to about a million dollars.

00:06:08Three-quarters of a million to a million dollars in that party.

00:06:13A million-dollar party, Andy Williams, big bonuses.

00:06:17Then, to top it all off, this year, Carl played his people a video.

00:06:21Carl, why do you have so much money?

00:06:23Why does the president know the banana guy?

00:06:34Well, as long as she asks, since 1988, Carl Lindner and his company and associates have given

00:06:40$650,000 to the National Democratic Party.

00:06:44So that could be why the president knows the banana guy.

00:06:47It was money and love, little buddy.

00:06:49Don't you worry.

00:06:50Well, if it was love, this little buddy apparently loves the Republicans even more, giving that

00:06:56party $1.5 million.

00:06:59So they know the banana guy, too.

00:07:01I hit him on the phone.

00:07:02I said, what were you doing there, right behind Clinton?

00:07:05He laughed about it.

00:07:06He said, well, I was here, he said, because I support that place.

00:07:08I said, okay, Carl.

00:07:10Yeah.

00:07:11Almost on a daily basis, some part of his business is affected by what's going on in Washington.

00:07:19And when Carl Lindner has a problem, he knows that he can pick up the phone and he can get

00:07:24the attention of a lawmaker who is going to have direct influence on his particular problem.

00:07:31David Owen was Lieutenant Governor of Kansas and was Chief Fundraiser and Campaign Chairman for Bob Dole.

00:07:39There's a small group of people that know how to play the game, that contribute the money and raise the money so that they can have absolute impact on legislation that affects their

00:07:51company or their industry.

00:07:53I'm Chiquita Banana and I'm here to reveal a way to spot a great banana.

00:07:57Right now, Carl Lindner's Chiquita Banana Company is having a little problem.

00:08:01Do I think he is talking to anybody he can talk to in the present administration, in the Congress, and in the Senate?

00:08:09Absolutely.

00:08:10I think in the last couple of years, they've lost over $400 million to nothing but trade restraint kinds of policies in Latin America and Europe.

00:08:19Well, maybe, but here's what we know.

00:08:23For years, Chiquita grew lots of bananas and then got contracts and sent them to Europe.

00:08:28It was a good business.

00:08:30So when the European Union announced that it would restrict its contracts, Chiquita suddenly found itself cut off.

00:08:37Chiquita said its sales suffered, profits dropped, and Carl?

00:08:40Well, Carl went to Washington.

00:08:42Chiquita, which does not grow bananas in the United States, demanded that America retaliate.

00:08:52By protesting in Europe and punishing Costa Rica and Colombia for going along with the scheme.

00:08:59The White House was sympathetic.

00:09:01That's satisfactory with a distinguished Democratic leader.

00:09:04Senator Robert Dole told his colleagues that he, too, wanted sanctions against Costa Rica and Colombia.

00:09:09In the middle of the national budget debate, he attached a banana bill to some budget legislation and told senators bananas are a top priority.

00:09:19But were you surprised to see bananas in the middle of the budget debate as a writer?

00:09:24I serve on the Finance Committee.

00:09:26You're never surprised by anything.

00:09:28So bananas was just another day at the office?

00:09:29But what happened was Chiquita bananas, or whatever the bananas were, it, I mean, it was an inappropriate place.

00:09:36I mean, these things come up from time to time.

00:09:39And this just, this wasn't even, this wasn't even a close call.

00:09:44The banana amendment stalled, but Carl Lindner took a different tap.

00:09:48Carl had gotten a meeting in Miami with the president of Colombia.

00:09:52He forcefully presented his case.

00:09:55Mr. Lindner tried to, to show how powerful he was in the United States by taking out of his pocket quite a number of photographs of himself with President Bush, President Reagan,

00:10:10and, and, and, and, and I, I, I, I think, uh, uh, uh, Republican leader Dole, and, uh, besides he mentioned he was going to have breakfast with the Speaker Gingrich next morning.

00:10:23And I think that was too much, you know, um, I've been, uh, very near power myself.

00:10:30My father was president of Colombia, uh, and, uh, I, I'm not easily, uh, uh, moved by this kind of things, either by threats or by the fact that people are friends of, uh, influential people.

00:10:49Uh, so I thought it was a very bad taste.

00:10:52And just one taste of my banana says the sticker was right.

00:11:00Then, this fall, on the way home from the funeral of Yitzhak Rabin, in the back of the president's plane,

00:11:07Senator Dole urged the Speaker of the House, Newt Gingrich, to take up the banana case.

00:11:12And Gingrich agreed.

00:11:15So, on the president's plane, in the Congress, at the White House, with the president of Colombia,

00:11:21everybody was discussing bananas, in part because Carl Lindner got those conversations going.

00:11:27Who else gets this kind of attention?

00:11:33Well, back on Capitol Hill, we wondered if a senator enters the office and faces a stack of phone messages,

00:11:39whose calls does he take?

00:11:41We asked former Missouri Senator John Danforth.

00:11:44When your wife calls you on the phone, you're likely to take the call.

00:11:48Um, when your best friend calls you on the phone, you're likely to take the call.

00:11:52When people you've known all your life call, you're likely to take that call.

00:11:58When people you've heard of, or people that you, you know, know,

00:12:02or people you think, you know, have some position that, I mean, that's obvious, I think.

00:12:12And people who contribute?

00:12:16Big money?

00:12:19Yeah.

00:12:21I'm just wondering, what do I get from giving money to you?

00:12:24If I give you $10,000 over a number of years, would you know my name?

00:12:32I may or I may not.

00:12:35$50,000, including my wife, my three children, and our first cousins.

00:12:39If you were a major fundraiser, I probably would.

00:12:43If you raise a sizable amount of money, I probably would.

00:12:46So if it's Tuesday, it's Tuesday at 10 o'clock in the morning,

00:12:49and I call you because I'm very concerned about something,

00:12:52do you take my call?

00:12:53You know what?

00:12:54The best people never make that call.

00:12:57I'm not the best people.

00:12:58I'm kind of a mediocre person.

00:13:00Chances are...

00:13:00But I've called you and I've given you...

00:13:02All right, all right, all right.

00:13:03So you know the question.

00:13:03Do you take the call?

00:13:04I may or may not.

00:13:05Depends on how I was feeling that day.

00:13:07Depends on what the issue was.

00:13:10If you don't take the call, I could be mad at you.

00:13:12No more $30,000.

00:13:13Well, you know, those are the breaks.

00:13:17This January, Karl Lindner got a break of sorts.

00:13:20The White House formally declared that Colombia and Costa Rica violated free trade laws.

00:13:26The U.S. will not impose sanctions,

00:13:28and Senator Dole, who's gotten lots of media attention for his banana work,

00:13:32has backed off a bit.

00:13:33But still, Karl Lindner now has official government backing for his position,

00:13:38and he didn't have that last year.

00:13:41Can you think of any society throughout history,

00:13:44go back, if you like, to Hammurabi or someone,

00:13:47where the rich people have not been able to use money

00:13:51to buy favors from the king or the powerful class?

00:13:56Anytime, anyplace.

00:13:57Oh, I think that's pretty much the case down through history.

00:14:01As you say, there are minor interruptions.

00:14:03You have periods where the rich are really in trouble politically.

00:14:07I think we could fairly say that in 1793 and the terror in France,

00:14:12they were in trouble.

00:14:13Then you have periods in which it's kind of a normal balance,

00:14:17which is to say that, yes, money buys favors,

00:14:19but it doesn't buy so much that it perverts the culture of the political system.

00:14:23Then you rise to certain points where it does.

00:14:27And these are usually in the periods of excess,

00:14:30periods of great corruption, and speculative bubbles.

00:14:33What was the high point in the last hundred years of American history?

00:14:37The Gilded Age right at the end of the 19th century,

00:14:41the Roaring Twenties, and then the last 15 years.

00:14:44About a year and a half ago,

00:14:49President Clinton arrived in California on Air Force One.

00:14:53Joining him were three former U.S. presidents,

00:14:56cabinet secretaries, senators,

00:14:57and some of the most important political figures of the last 40 years.

00:15:02The occasion was former President Nixon's funeral.

00:15:07And there, coming down the stairs,

00:15:08was a man who'd known them all,

00:15:10President Carter's former special trade representative,

00:15:13Ambassador Robert Strauss.

00:15:15Well, in those days, people dealt primarily in cash.

00:15:20Most people preferred to give their contributions in cash,

00:15:24and most people preferred to receive them in cash.

00:15:28Then there came a period of time,

00:15:29really growing out of Watergate,

00:15:32when legislation that had been on the books

00:15:34and laws that had been on the books,

00:15:36started being forced.

00:15:39And that's when a change took place.

00:15:43Now, if you look closely,

00:15:44there was one man on the plane

00:15:45who never served in any government position.

00:15:48That guy.

00:15:49Dwayne Andreas,

00:15:50president of a giant food company, ADM,

00:15:53is possibly the champion political contributor of our era.

00:15:58He happens to be a man who believes very genuinely

00:16:02that people who run for office ought to be supported.

00:16:06And he supports them, both sides,

00:16:08and people who agree with him disagree with him.

00:16:11If you come by and you make a good impression on him,

00:16:13you say, I want to run for,

00:16:14I'm running for this office, Mr. Andreas,

00:16:15I'd like to have support.

00:16:17He's apt to give you some support.

00:16:19Back in 1968,

00:16:22Andreas supported the Democratic presidential candidate

00:16:25Hubert Humphrey

00:16:26with a $100,000 contribution sent through his company.

00:16:30Andreas was accused and then acquitted

00:16:32of making an illegal contribution.

00:16:35I have never profited, never profited.

00:16:39Four years later,

00:16:40he delivered $100,000 in cash

00:16:42to the Nixon White House

00:16:43to be kept in a White House vault.

00:16:45Hunt was said to be the man

00:16:48who recruited the other conspirators.

00:16:49While another Andreas donation,

00:16:51$25,000 in cash,

00:16:53found its way to the Watergate burglars.

00:16:56The image of wealthy businessmen

00:16:58sneaking cash to politicians

00:17:00angered the public.

00:17:01Advisor to the Nixon campaign staff.

00:17:05Someone solicited him for a contribution.

00:17:06He gave him a contribution.

00:17:08It went the wrong place.

00:17:11You can't blame him for that.

00:17:13Right now,

00:17:15if I am a donor,

00:17:17what are the rules?

00:17:18What are my limits?

00:17:19Well, you can only give,

00:17:21as an individual donor,

00:17:22$1,000 in the primary

00:17:24and $1,000 in the general election.

00:17:26Just for me.

00:17:26How about my wife?

00:17:27Well, that too.

00:17:28How about my kids?

00:17:29The children, absolutely.

00:17:30So if I have 16 children,

00:17:32I can give $16,000

00:17:33plus the two for me and my wife.

00:17:35Is there any limit

00:17:35on the amount of money

00:17:36I can give to the Republicans in general

00:17:38or the Democrats in general?

00:17:39In terms of campaign

00:17:41and strict party contributions,

00:17:44yes,

00:17:44but in terms of soft dollars,

00:17:46this is a loophole which exists.

00:17:48What does that mean soft dollars?

00:17:49Soft dollars are soft legally

00:17:52because they're not really legal,

00:17:54but they are.

00:17:55They're given for purposes

00:17:56which are really party-building activities

00:17:59and mostly at the state level.

00:18:02And as a result,

00:18:03people can just pour money in

00:18:05to the party coffers

00:18:07through soft dollars.

00:18:08There's no limit,

00:18:09there's no $1,000 limit here?

00:18:11No.

00:18:11No.

00:18:18You and I

00:18:19and 14,000 others

00:18:22have raised over $9 million

00:18:24through this event alone.

00:18:27This dinner,

00:18:28put on by the Republican Party

00:18:29four years ago,

00:18:31raised more campaign money

00:18:32than any previous meal

00:18:34in American history.

00:18:36$9 million in one sitting.

00:18:38And up on the dais

00:18:39right next to Dan Quayle,

00:18:41a quarter century

00:18:42after Hubert Humphrey

00:18:43and then Watergate and Nixon,

00:18:44there sits

00:18:45Dwayne Andrius,

00:18:47still there,

00:18:48and his contribution

00:18:49on this night?

00:18:52$400,000.

00:18:54Well, he supports presidents.

00:18:57He supports presidents.

00:18:59That's what a good businessman does.

00:19:01Instead of carving and criticizing,

00:19:03they support them.

00:19:03They support them.

00:19:06They support them.

00:19:15Ladies and gentlemen,

00:19:17please welcome

00:19:17Senator Bob Dole.

00:19:20It's always taken money

00:19:21to run for president,

00:19:23but this year,

00:19:24it's more expensive than ever.

00:19:25Senator Phil Graham.

00:19:27The field is so crowded

00:19:29and the primaries

00:19:30are bunched

00:19:31as never before,

00:19:33so to stand out,

00:19:35TV and radio

00:19:36and direct mail

00:19:37and polling

00:19:38are more important

00:19:39than ever

00:19:39and they cost more.

00:19:43At this point,

00:19:45the candidates

00:19:45have spent five times more

00:19:47than they'd spent

00:19:48four years ago.

00:19:49How much money

00:19:54do you think it takes

00:19:55to make a serious run

00:19:57for a nomination

00:19:58so that you'd get noticed

00:19:59and have a serious shot

00:20:01at a national political nomination

00:20:03for the presidency

00:20:04in gross numbers?

00:20:07Before the multi-millionaires

00:20:10entered the race

00:20:12or billionaires entered the race,

00:20:13I would have said

00:20:14you could do it

00:20:15on $15 million.

00:20:17But if somebody like Forbes

00:20:19is going to spend

00:20:20$25 at the start

00:20:23and perhaps double that,

00:20:24it's impossible to say

00:20:26what it takes to run.

00:20:27How much has the fact

00:20:30that you can only get it

00:20:31in $1,000 or $5,000 nibbles

00:20:34affected the amount of time

00:20:35you had to spend

00:20:36as a money raiser

00:20:38while you were running?

00:20:40Fundraising is very,

00:20:41very time-consuming

00:20:43and the heart of the effort

00:20:45I would spend two

00:20:48or three hours a day

00:20:49on the phone

00:20:50raising money.

00:20:51Did you like doing it

00:20:52or did you not like doing it?

00:20:56I've grown accustomed

00:20:57to its face.

00:20:58If you want to be in politics,

00:21:00if you really want

00:21:01to be in politics,

00:21:03you have to learn

00:21:04to like a lot of things

00:21:05that you don't like.

00:21:07And fundraising is a necessity

00:21:09and if you want to be

00:21:10in this particular line,

00:21:12you have to learn

00:21:12to accommodate

00:21:13to like fundraising.

00:21:15The next president

00:21:16of the United States

00:21:17of America,

00:21:19Senator Bob Dole.

00:21:20There are, of course,

00:21:21a number of ways

00:21:22for a candidate

00:21:23to attract money

00:21:23without the $1,000

00:21:24or $5,000 limits.

00:21:27David Owen knows that.

00:21:30Having worked with him

00:21:31for 20 years,

00:21:33it was,

00:21:34you start off calling,

00:21:36I'm calling for Bob Dole

00:21:37and it's Bob who,

00:21:39to you finally get,

00:21:41I'm calling for Bob Dole

00:21:42and they can't wait

00:21:43to get on the phone.

00:21:45Owen was Bob Dole's

00:21:46chief fundraiser

00:21:47until he was convicted

00:21:48for filing false tax returns

00:21:50and went to jail.

00:21:51He has since parted company

00:21:53with Dole.

00:21:53The two don't speak,

00:21:54but over the years,

00:21:55he says,

00:21:56he's seen politicians

00:21:57accommodate donors

00:21:58who want to write

00:21:59big checks.

00:22:01There are any number

00:22:02of ways

00:22:03that big fundraisers

00:22:04can participate

00:22:05and Bob Dole

00:22:07gives them

00:22:07a lot of ways.

00:22:08Well,

00:22:10you start off

00:22:11with his Senate

00:22:12campaign fund.

00:22:14Campaign America

00:22:15is a political

00:22:16action committee.

00:22:18The Dole Foundation,

00:22:19which is an organization

00:22:21he set up.

00:22:23You have the

00:22:24Better America Foundation

00:22:25and you have

00:22:28the presidential

00:22:29campaign funds.

00:22:33That's a lot of ways

00:22:35you can help.

00:22:38With so many options

00:22:39available,

00:22:40it's kind of interesting

00:22:41to pull together

00:22:42the numbers

00:22:42and see who has

00:22:43given Bob Dole

00:22:44the most money

00:22:46over the years.

00:22:47According to a new book

00:22:48by Charles Lewis,

00:22:49here are Bob Dole's

00:22:51top five lifetime donors

00:22:53from the bottom up.

00:22:55Beginning with

00:22:56number five.

00:22:59This is a conservative pack.

00:23:01Number four.

00:23:03Oh,

00:23:03is our friend

00:23:03Dwayne Andreas,

00:23:04the champ.

00:23:06Number three.

00:23:07Coke.

00:23:08That's an oil business.

00:23:10Number two

00:23:12is a financial firm.

00:23:15And number one

00:23:16at the very top.

00:23:17Oh,

00:23:17look at this.

00:23:17The Gallows.

00:23:19Now,

00:23:19why would Ernest

00:23:20and Julio Gallo,

00:23:21who have a vineyard

00:23:22out in California,

00:23:23why would they give

00:23:24$381,200

00:23:27to a senator

00:23:28who lives next

00:23:29to cornfields

00:23:30in Kansas?

00:23:31What is the connection here?

00:23:32Well,

00:23:33as you are about to see,

00:23:36the Gallows

00:23:36treat their politicians

00:23:38kind of like grapes.

00:23:40They plant their seeds early

00:23:42and then

00:23:43they wait.

00:23:45And they are very patient.

00:23:47Gallows' headquarters

00:23:50is hidden behind

00:23:52these trees.

00:23:53Unassuming,

00:23:55no corporate logo,

00:23:57no sign

00:23:58that lets you know

00:23:58this is the biggest

00:23:59winery in the world.

00:24:01The Gallows

00:24:02like their privacy

00:24:03and they have secrets.

00:24:07But you had to look

00:24:08exactly like your brothers,

00:24:09right?

00:24:10He's the brother

00:24:11you never heard of.

00:24:12Joseph,

00:24:14the youngest

00:24:14of the more famous brothers

00:24:16Ernest and Julio,

00:24:18he told his family story

00:24:19to journalist

00:24:20Ellen Hawkes.

00:24:22Two brothers,

00:24:23Michael and Joseph,

00:24:24Sr.,

00:24:25came to America

00:24:26at the turn of the century

00:24:27setting out

00:24:28to make their fortune.

00:24:31Michael Gallo

00:24:32was caught posing

00:24:33as a priest

00:24:33and arrested

00:24:34for selling land

00:24:35that did not exist.

00:24:37His brother,

00:24:38Joseph,

00:24:39married,

00:24:40had three children,

00:24:41got into the grape business

00:24:42and bought a vineyard.

00:24:47Prohibition was not

00:24:48the best time

00:24:48to be in the grape business,

00:24:50but the Gallows

00:24:50did well enough

00:24:51and the boys,

00:24:54Ernest, Julio

00:24:55and their younger brother

00:24:56Joseph pitched in.

00:25:00The Depression,

00:25:01however,

00:25:01took its toll.

00:25:02Sales dropped,

00:25:03many vineyards failed.

00:25:05But then,

00:25:06something happened

00:25:07that nobody

00:25:08in the family

00:25:08talks about.

00:25:09On June 21st,

00:25:121933,

00:25:13the bodies

00:25:14of Ernest,

00:25:14Julio and Joe's

00:25:15parents

00:25:16were found

00:25:16shot to death

00:25:17on their farm

00:25:18outside Fresno.

00:25:20And it was

00:25:20officially designated

00:25:22as a homicide-suicide,

00:25:25namely that

00:25:25the father, Joe,

00:25:26killed the mother

00:25:27and then shot himself.

00:25:33Ernest and Julio

00:25:34took over

00:25:34and after Prohibition,

00:25:36they began

00:25:36to expand the business.

00:25:38Julio was

00:25:40Mr. Inside.

00:25:41He grew the grapes,

00:25:43he hired the labor.

00:25:44While Ernest

00:25:45was Mr. Outside,

00:25:46managing the rough

00:25:47and tumble

00:25:47of sales

00:25:48and distribution,

00:25:49younger brother Joe

00:25:50was hired

00:25:51as an employee.

00:25:55The business

00:25:56prospered

00:25:57in the low end

00:25:57of the market.

00:25:58The Gallows'

00:25:59most famous brands

00:26:00were Paisano

00:26:01and the highly

00:26:02fortified cheap wines

00:26:03like Thunderbird

00:26:04and Ripple.

00:26:04Then the company

00:26:06decided to broaden

00:26:07its reach

00:26:08and go national.

00:26:09But the alcohol

00:26:10business was regulated

00:26:11by states

00:26:12and counties

00:26:13so Ernest had to deal

00:26:14with politicians

00:26:15all over the country.

00:26:17His most pointed

00:26:18political education

00:26:19came when he

00:26:20started to build

00:26:21the sales structure

00:26:22and was pushing

00:26:24Gallo wines

00:26:25nationally.

00:26:27It was at that point

00:26:28that he started

00:26:28running up against

00:26:30not only the federal

00:26:32regulations

00:26:32but from state

00:26:34to state

00:26:35and county

00:26:35to county

00:26:36the regulations

00:26:36would change.

00:26:38So Ernest

00:26:38was a very active

00:26:40lobbyist

00:26:40cultivating politicians

00:26:42who were the most

00:26:44useful to him.

00:26:46Ernest planted money

00:26:48all over the

00:26:49political landscape

00:26:50to help pave the way.

00:26:51$3,250

00:26:52to Alan Cranston.

00:26:54$1,000

00:26:55for Leon Panetta

00:26:56starting his career

00:26:57in Congress.

00:26:58$500

00:26:59for Jerry Brown

00:27:00who was then running

00:27:01for Secretary of State.

00:27:07By the 1970s

00:27:09the Gallos

00:27:09were doing very well.

00:27:11Here they are

00:27:11with the rest

00:27:12of the family.

00:27:13There's Ernest

00:27:13and Julio

00:27:14getting a little

00:27:14peck on the cheek.

00:27:18They are a large

00:27:19family now.

00:27:21The brothers

00:27:21had eight children

00:27:22plus their families

00:27:23and 24 grandchildren.

00:27:26There's little

00:27:27Micah.

00:27:27My pleasure

00:27:28as the godfather

00:27:30of Micah

00:27:31to wish

00:27:32the best wishes

00:27:33to Micah

00:27:34and Sherry

00:27:35and Mike

00:27:35and all the family

00:27:37that had something

00:27:37to do with this child.

00:27:39Toast.

00:27:42By now

00:27:43the Gallos

00:27:44were so wealthy

00:27:44if either Ernest

00:27:46or Julio died

00:27:47the business

00:27:47might have to be

00:27:48broken up

00:27:49to pay the

00:27:49inheritance taxes

00:27:50so they tried

00:27:52to change the law.

00:27:54A Washington law firm

00:27:55designed some

00:27:56legislation

00:27:56and gave it

00:27:57to Senator

00:27:58Alan Cranston

00:27:59who had been

00:27:59helped by the Gallos

00:28:00in a tough

00:28:00re-election campaign.

00:28:03Cranston

00:28:03brought the bill

00:28:04to the Senate floor

00:28:05on a rare

00:28:06Saturday session

00:28:07and with only

00:28:07a handful

00:28:08of Senators present

00:28:09it passed.

00:28:13The Gallos

00:28:14got what they wanted

00:28:15but the newspapers

00:28:16noticed

00:28:16and the critics

00:28:18charged that the Gallos

00:28:19had bought

00:28:20the amendment.

00:28:20on the floor

00:28:22of the Senate

00:28:23Senator Robert Dole

00:28:24referred to the law

00:28:25as the Gallo

00:28:27Wine Amendment.

00:28:30But at the end

00:28:31of it all

00:28:32somebody was left

00:28:33out of the party.

00:28:34Ernest and Julio's

00:28:35younger brother Joe.

00:28:37He and his side

00:28:38of the family

00:28:38were the poor relations.

00:28:41They'd worked

00:28:42for Ernest and Julio

00:28:43but then in 1986

00:28:45Joe got to see

00:28:46his mother's will

00:28:47and discovered

00:28:48that he had not

00:28:49been told

00:28:49by his two older

00:28:50brothers that he

00:28:51was named

00:28:51as an equal

00:28:52beneficiary.

00:28:55He went to court

00:28:56but he could not

00:28:57prove he was entitled

00:28:58to a share

00:28:59of his brother's

00:28:59business.

00:29:02I interviewed him

00:29:03during the trial

00:29:04I see him now.

00:29:07Joe has never

00:29:07been the same.

00:29:09She was beautiful.

00:29:10Ernest and Julio

00:29:11kept control

00:29:12of the family

00:29:12fortune

00:29:13and the business

00:29:14the biggest

00:29:15wine company

00:29:15in the world.

00:29:17They were

00:29:17multi-millionaires

00:29:18but the more

00:29:19they had

00:29:20the more

00:29:20they had

00:29:21to protect.

00:29:22So they kept

00:29:23helping politicians.

00:29:24The young mayor

00:29:25of San Diego

00:29:25Pete Wilson

00:29:26became a U.S.

00:29:27senator

00:29:27and then a governor.

00:29:29The Gallows

00:29:29have given him

00:29:30$55,000.

00:29:32Leon Panetta

00:29:33whom the Gallows

00:29:34had given

00:29:34$33,000

00:29:35was now a rising

00:29:37star in Congress.

00:29:41Where by 1986

00:29:43the mood

00:29:44was changing.

00:29:47Democrats

00:29:48were rewriting

00:29:49the tax code

00:29:49and the Gallows

00:29:50saw another chance

00:29:51to lower

00:29:52their inheritance

00:29:53taxes.

00:29:54That session

00:29:55everybody came

00:29:56to town.

00:29:57The halls

00:29:58were full

00:29:58of lobbyists

00:29:59trying to get

00:30:00to their favorite

00:30:00politicians.

00:30:02They were just

00:30:03anundated with

00:30:04calls about

00:30:05you know

00:30:05you understand

00:30:06what you're doing

00:30:07to my business

00:30:09my company

00:30:10my industry

00:30:11you know

00:30:11if you just

00:30:12put in this

00:30:12little amendment

00:30:13here that would

00:30:13solve our problem

00:30:14and once it

00:30:16started

00:30:16it opened

00:30:17a floodgate.

00:30:19So the Gallows

00:30:20turned to

00:30:20David Owen's

00:30:21boss

00:30:21the man

00:30:22who eight

00:30:22years earlier

00:30:23had dubbed

00:30:23their bill

00:30:24the Gallow

00:30:25Wine Amendment.

00:30:26When it first

00:30:26came up

00:30:27I'm sure

00:30:28that the Gallows

00:30:29weren't people

00:30:29that Bob Dole

00:30:30knew

00:30:30but he figured

00:30:33out it was

00:30:33someone that

00:30:34he needed

00:30:35to get to know

00:30:35if he were

00:30:36going to play

00:30:36in the national

00:30:37political arena

00:30:38in California

00:30:40and so he made

00:30:41it a point

00:30:42to get to know

00:30:42them

00:30:42and when he

00:30:44got to know

00:30:44them

00:30:45that provided

00:30:45the access.

00:30:47The new

00:30:47Gallow Amendment

00:30:48passed

00:30:49and in one week

00:30:50while the bill

00:30:51was being written

00:30:52Senator Dole

00:30:53received four

00:30:54$5,000 contributions

00:30:56from Ernest

00:30:57and then Ernest's

00:30:58wife

00:30:58and then Julio

00:30:59and then Julio's

00:31:00wife.

00:31:01The money

00:31:01went to Dole's

00:31:02political action

00:31:03committee

00:31:03and in the years

00:31:05since that amendment

00:31:06Senator Dole

00:31:07and his foundations

00:31:08have received

00:31:09$1.1 million

00:31:11from the Gallows

00:31:13and their associates.

00:31:15The new amendment

00:31:16could have saved

00:31:17Ernest roughly

00:31:17$23 million

00:31:18in estate taxes

00:31:20and the same

00:31:20for Julio

00:31:21who died

00:31:22in 1993.

00:31:25Let's say

00:31:26just for the sake

00:31:27of argument

00:31:27that what we've

00:31:28just seen

00:31:29is the Gallows

00:31:29sprinkle a little

00:31:30money into

00:31:31the political arena

00:31:32and they get

00:31:33a bill that

00:31:34is worth say

00:31:34$23 million

00:31:36to their grandchildren.

00:31:37if they were

00:31:39trading money

00:31:39for favors

00:31:40and we don't

00:31:40really know

00:31:40that they did

00:31:41but if they were

00:31:41isn't this

00:31:42a terrific deal?

00:31:43If one considers

00:31:44it to be

00:31:44an investment

00:31:45of $1 million

00:31:46or $2 million

00:31:47in order to get

00:31:48$20 million

00:31:48return

00:31:49obviously

00:31:50it's a very

00:31:51good investment.

00:31:53On many

00:31:54minor issues

00:31:56it is possible

00:31:57as a result

00:31:58of political

00:31:59contributions

00:32:00to get

00:32:00special treatment

00:32:02in the law.

00:32:03At a really low price.

00:32:05There's no question

00:32:05about that

00:32:06but that doesn't

00:32:08necessarily mean

00:32:09that the entire

00:32:10system is corrupt.

00:32:12But when you see

00:32:13a bill passed

00:32:13by the United States

00:32:14Congress

00:32:15that affects

00:32:16very, very few

00:32:17families in the

00:32:18United States

00:32:18can you assume

00:32:20that hadn't

00:32:21one of those families

00:32:22put a little money

00:32:23in the right places

00:32:24that there would be

00:32:24no such law?

00:32:26One can make

00:32:27that assumption

00:32:28absolutely.

00:32:29They probably

00:32:30would not have done it

00:32:31had it not been

00:32:32for the contributions.

00:32:35When a family

00:32:37like the Gallows

00:32:37tries to

00:32:38ask for a favor

00:32:40or implies

00:32:40how do they do it?

00:32:44They've never

00:32:45approached me

00:32:45so I don't know

00:32:46what their style is.

00:32:48I don't know

00:32:48what their strategy is.

00:32:51Most people

00:32:52who want

00:32:53to affect legislation

00:32:54work through

00:32:56high priced

00:32:57Washington lobbyists

00:32:58who insulate them

00:33:00from direct

00:33:02involvement.

00:33:04So that you would

00:33:04never meet

00:33:05Ernest Gallo

00:33:06you'd meet

00:33:06some other guy.

00:33:07Probably.

00:33:08Probably.

00:33:09And it's said

00:33:10no one knows

00:33:11how to work

00:33:11these halls

00:33:12better than

00:33:12our friend

00:33:13Dwayne Andrius

00:33:14and his lawyers

00:33:15Aiken,

00:33:15Gump and Strauss.

00:33:18He's a man

00:33:19who knows

00:33:19politicians

00:33:20personally

00:33:21who gives

00:33:22tremendous amounts

00:33:23of money

00:33:24both hard

00:33:25and soft

00:33:26and then

00:33:27stays in the

00:33:28background

00:33:29while lawyers

00:33:30talk to staff

00:33:31people

00:33:32while trade

00:33:33association

00:33:34executives

00:33:35mingle with

00:33:36congressional staff.

00:33:38The message

00:33:39is always given

00:33:40indirectly.

00:33:42The way he

00:33:42operates

00:33:43is a way

00:33:44in which you

00:33:45can never tie

00:33:46a particular

00:33:47contribution

00:33:48to a particular

00:33:49vote.

00:33:50It's a very

00:33:51sophisticated

00:33:51very subtle way.

00:33:53It's high class

00:33:55and very expensive.

00:33:58Talk about

00:33:59high class

00:34:00Dwayne Andrius

00:34:01has another way

00:34:02to help his friends.

00:34:03He owns

00:34:03four jets

00:34:04and a turboprop

00:34:05and whenever he chooses

00:34:07he lends them

00:34:07to candidates.

00:34:09Bob Dole

00:34:10has used

00:34:10Andrius' planes

00:34:1128 times

00:34:13since 1990.

00:34:15In fact

00:34:16Dole has a whole

00:34:17list of plane

00:34:18lending friends.

00:34:19His staff

00:34:20knows that

00:34:20if they want

00:34:22to travel

00:34:22anywhere

00:34:24all they have

00:34:26to do

00:34:26is pick up

00:34:26the phone

00:34:27and call

00:34:28someone

00:34:28in corporate

00:34:29America

00:34:30who has

00:34:31a nice

00:34:31jet airplane

00:34:33and say

00:34:33that they would

00:34:34like to use

00:34:34that plane

00:34:35for a political

00:34:36trip.

00:34:37And there's

00:34:37nothing illegal

00:34:38about it.

00:34:39All they have

00:34:39to do

00:34:39is pay

00:34:40a first class

00:34:40airfare

00:34:41for the use

00:34:41of the plane

00:34:42and they can

00:34:43fly anywhere

00:34:43they want to.

00:34:44First class

00:34:45airfare

00:34:46that's all?

00:34:46That's all.

00:34:48Wait, wait, wait.

00:34:48Wait, wait, wait.

00:34:49This plane

00:34:50is not like

00:34:51a real

00:34:52I mean

00:34:52it's available

00:34:53when I want it

00:34:54it will fly me

00:34:56to Cedar Rapids

00:34:56or onwards

00:34:57to Council Bluffs

00:34:59at a time

00:34:59when there's no

00:35:00or to the town

00:35:01where no planes fly.

00:35:02So it's not like

00:35:03a

00:35:03and

00:35:04It's like a charter

00:35:05it's like a charter

00:35:06even though

00:35:08the cost of

00:35:08flying that plane

00:35:10may be much more

00:35:11and

00:35:12Much more.

00:35:13Let me give you

00:35:13a number.

00:35:14If you wanted

00:35:14to take a first class

00:35:15ticket from Washington

00:35:16to L.A.

00:35:17that would cost

00:35:18$3,000.

00:35:18If you want

00:35:19to fly in a

00:35:20Gulfstream 4

00:35:21at your own bidding

00:35:22with the thing

00:35:23ready to go

00:35:24whenever you

00:35:24and then land

00:35:25whenever you

00:35:26and go wherever you

00:35:26please

00:35:26it would cost

00:35:27about $40,000

00:35:27to $50,000.

00:35:29So you're paying

00:35:30$3,000 to get

00:35:31what is in effect

00:35:31a $50,000 service.

00:35:34Doing the math

00:35:34that strikes me

00:35:35as a $47,000

00:35:36advantage.

00:35:38There's no question

00:35:38that it's an advantage

00:35:40it's a benefit.

00:35:43Companies seem

00:35:43to sense

00:35:44this is a very

00:35:45valuable favor.

00:35:47There are so many

00:35:48planes available

00:35:48now that politicians

00:35:49can get choosy.

00:35:51And it almost

00:35:53gets to the point

00:35:54of I don't want

00:35:55to go in

00:35:55I don't want

00:35:56to go anything

00:35:57less than a

00:35:58Gulfstream 4.

00:36:00Gulfstreams

00:36:01are deluxe jets

00:36:03and Carl Lindner's

00:36:04brother Robert

00:36:05owns one.

00:36:07You remember

00:36:08Carl the

00:36:09Banana Man

00:36:09from Cincinnati?

00:36:11Well the

00:36:11Banana Man's

00:36:12firm has an

00:36:13air hanger

00:36:14that has a

00:36:14glass picture

00:36:16window so you

00:36:16can look in

00:36:17and see the

00:36:18planes.

00:36:19And in 1995

00:36:20Senator Dole

00:36:21flew on these

00:36:22planes 12 times.

00:36:24This plane here

00:36:25for example

00:36:26is the exact

00:36:27same plane

00:36:27you see here

00:36:28on a campaign

00:36:29trip to New

00:36:30Hampshire.

00:36:33But the biggest

00:36:34jet of all

00:36:35is the one

00:36:35we own

00:36:36Air Force One.

00:36:38Last September

00:36:39President Clinton

00:36:40did a quick hop

00:36:40to five cities

00:36:41in a week

00:36:42and raised

00:36:42five million

00:36:43dollars for

00:36:44his campaign.

00:36:45It costs

00:36:46more than

00:36:46thirty six

00:36:47thousand dollars

00:36:48an hour

00:36:49to operate

00:36:49Air Force One

00:36:50but all

00:36:51President Clinton

00:36:52paid was

00:36:52first class

00:36:53airfare for

00:36:54his staff

00:36:54forty four

00:36:55thousand dollars.

00:36:57That is less

00:36:58than an hour

00:36:59and a half

00:37:00of flying time.

00:37:02Is it true

00:37:03what most people

00:37:04say that United

00:37:05States senators

00:37:05don't know about

00:37:06transferring in

00:37:07Minneapolis

00:37:07because they're

00:37:08always on these

00:37:09kind of planes?

00:37:10Yeah I think

00:37:10that is a gross

00:37:13exaggeration.

00:37:14One might even

00:37:15say a kind

00:37:17of base

00:37:18well I mean

00:37:19I think it's

00:37:19a gross

00:37:20exaggeration.

00:37:22One of the best

00:37:22moments of my

00:37:23years in public

00:37:24service was

00:37:25on the

00:37:27Washington New

00:37:28York shuttle

00:37:29on a Friday

00:37:30night when I

00:37:31was squeezed

00:37:31between Paul

00:37:32Volker who was

00:37:33then chairman

00:37:33of the Federal

00:37:34Reserve and

00:37:35some other

00:37:35cabinet official

00:37:37in the

00:37:37administration

00:37:37I was in

00:37:38the center seat

00:37:39and I thought

00:37:39to myself

00:37:40hmm I guess

00:37:42this is

00:37:42democracy.

00:37:49It's that

00:37:50season again.

00:37:51Alright you

00:37:52got em?

00:37:53Politics in

00:37:54Iowa.

00:37:56Where presidential

00:37:57candidates will do

00:37:58just about anything

00:37:59to draw a crowd.

00:38:02This is the

00:38:03Charlton Heston

00:38:04NRA celebrity

00:38:05shootout and

00:38:06these folks are

00:38:07here to support

00:38:07Senator Phil

00:38:08Graham's campaign.

00:38:10We've got people

00:38:11coming from all

00:38:12over the state.

00:38:13We've had a real

00:38:14grassroots effort

00:38:15and I'm very

00:38:15proud of it.

00:38:18How's Wendy?

00:38:19Good.

00:38:19She's here

00:38:20somewhere.

00:38:20Oh is she?

00:38:21We're out here

00:38:22at the shoot.

00:38:23Hi, nice to see you.

00:38:24Jeff, come on over.

00:38:26One way to

00:38:26influence a husband

00:38:27of course is to do

00:38:28something nice for

00:38:29his wife.

00:38:30You look great.

00:38:30Well thanks for

00:38:31taking care of the

00:38:32weather you know.

00:38:33You're entirely

00:38:34welcome.

00:38:34I'm glad you

00:38:35noticed it.

00:38:35But as we shall

00:38:36see, this approach

00:38:38can be exquisitely

00:38:39difficult.

00:38:41When a woman in a

00:38:43leadership position

00:38:43is married to a

00:38:44political candidate,

00:38:46she is going to be

00:38:47disadvantaged no matter

00:38:48what she does.

00:38:49And she's going to

00:38:50create conflicts of

00:38:51interest if she tries

00:38:52to pursue her career.

00:38:57She came to

00:38:58Washington as the

00:38:59wife of a politician.

00:39:00But she could have

00:39:01come in her own

00:39:01right.

00:39:02She's a PhD in

00:39:04economics, a former

00:39:05government official.

00:39:06Ronald Reagan called

00:39:07her his favorite

00:39:08economist.

00:39:09And he appointed her

00:39:10to chair the CFTC,

00:39:12the Commodities Futures

00:39:13Trading Commission.

00:39:15I speak for all my

00:39:16fellow commissioners

00:39:17when I say that the

00:39:18commission will continue

00:39:19to use all available

00:39:22means to protect the

00:39:23public confidence.

00:39:24As chair of the CFTC,

00:39:26Wendy regulated futures

00:39:27contracts for commodities

00:39:28like beef and soybeans

00:39:30and pork bellies.

00:39:31And some say she also

00:39:33regulated her husband.

00:39:35On this, there will be

00:39:36no compromise.

00:39:38Wendy Graham, because

00:39:39she's different than

00:39:40Hillary, is going to be

00:39:41dismissed by some.

00:39:43They do it at their own

00:39:45peril.

00:39:46She is very, very

00:39:48important to Phil

00:39:48Graham.

00:39:50Not only to his person,

00:39:52but to his politics.

00:39:54She just has a

00:39:56different style of

00:39:58affecting that politics.

00:39:59When Wendy Graham

00:40:02left the government,

00:40:03she was offered

00:40:04positions on a number

00:40:05of corporate boards,

00:40:07sometimes by executives

00:40:08who were strong

00:40:09supporters of her

00:40:09husband.

00:40:10This raised the

00:40:11question, if she

00:40:12joined, would that

00:40:13become a problem for

00:40:14Phil?

00:40:15Women in positions

00:40:16of leadership are

00:40:17faced with the

00:40:18question, should I

00:40:19sacrifice my career

00:40:20in order to avoid

00:40:21conflicts of interest,

00:40:23or should I pursue

00:40:24my career and as a

00:40:25result accomplish what

00:40:26I could otherwise

00:40:27accomplish and run the

00:40:28risk that my husband

00:40:29is at disadvantage

00:40:30because it looks as

00:40:31if the boards that

00:40:33I'm serving on, for

00:40:34example, are creating

00:40:35problems for him and

00:40:36his political campaign.

00:40:39Mr. and Mrs.

00:40:41Alec Cortellis.

00:40:43Take this event.

00:40:46Mr. and Mrs.

00:40:48Charlton Heston.

00:40:49It was a big

00:40:50fundraiser for Phil

00:40:51Graham.

00:40:52$4.5 million

00:40:54raised to kick off

00:40:55his campaign.

00:40:57A co-chair of the

00:40:58event was Kenneth

00:40:59Lay.

00:41:00Now, Mr. Lay is the

00:41:01president of Enron, an

00:41:03oil and gas firm that

00:41:04Wendy Graham regulated

00:41:05when she was in

00:41:06Washington.

00:41:07Now, she's on his

00:41:08board.

00:41:09She gets $22,000 plus

00:41:11some fees.

00:41:13But early last year,

00:41:14Enron gave $18,500 to

00:41:17her husband's campaign.

00:41:18And so, we have a

00:41:20difficult ethical

00:41:21situation because the

00:41:23question is, would the

00:41:24woman have been there

00:41:25in any event, or is

00:41:27she there because

00:41:28specifically the

00:41:29corporation is

00:41:30attempting to buy

00:41:31influence with the

00:41:32candidates, with the

00:41:33candidate, through the

00:41:35candidate's spouse?

00:41:36Take the case of

00:41:37another board Wendy's

00:41:38on, the IBP, Iowa

00:41:41Beef Processors.

00:41:43This company controls

00:41:44one-third of the U.S.

00:41:46beef market.

00:41:47It is the world's

00:41:48largest meatpacking

00:41:50company.

00:41:52IBP has had its share

00:41:53of difficulties with

00:41:54the government.

00:41:55Labor problems, wage

00:41:57problems, immigration

00:42:00problems, union

00:42:02troubles.

00:42:03IBP is an ideal case

00:42:05study.

00:42:06Wendy Graham belongs on

00:42:08that kind of board.

00:42:09She has a Ph.D. in

00:42:10economics.

00:42:12She chaired the

00:42:13commodities exchange.

00:42:14There's no question that

00:42:15she's qualified to serve

00:42:17on the board.

00:42:18She's given remuneration

00:42:19for being on the board.

00:42:20That puts money into the

00:42:22family coffers.

00:42:23But more importantly for

00:42:25Phil Graham, IBP is a

00:42:27major employer in Iowa.

00:42:29Iowa.

00:42:30It's important not just

00:42:31because of the famous

00:42:32Iowa caucus, but because

00:42:34there's an early straw poll

00:42:36here.

00:42:36It's the candidate's first

00:42:37chance to get big

00:42:38headlines.

00:42:41The straw poll is a kind

00:42:43of beauty contest.

00:42:45For 25 bucks, anybody, even

00:42:47if you don't live in the

00:42:48state, gets to vote.

00:42:49But some candidates have

00:42:51been known to buy up

00:42:52blocks of tickets and

00:42:53then round up people to

00:42:54give them to.

00:42:56On this occasion, Phil

00:42:57Graham got some help.

00:43:00Two and a half weeks

00:43:02before the vote, Iowa Beef

00:43:04Processor sent this memo to

00:43:05its employees, encouraging

00:43:08them to attend and

00:43:10participate in the straw poll.

00:43:12The company said the

00:43:13Graham for President

00:43:14campaign would provide

00:43:15buses and tickets to all

00:43:17interested employees, and

00:43:18the memo ended, plan to

00:43:20see you there.

00:43:23Please vote for me.

00:43:24I'll let you down.

00:43:25Who at IBP decided to

00:43:27help Phil Graham?

00:43:29The company's president,

00:43:30Bob Peterson, would not be

00:43:31interviewed.

00:43:32But we were able to talk

00:43:34to his close friend and

00:43:35biggest cattle supplier,

00:43:36Bill Haw.

00:43:37The history of IBP for all

00:43:39the time I've known them is

00:43:40that they're a completely

00:43:41non-political organization.

00:43:44So I was surprised.

00:43:46I asked Bob what had

00:43:47happened.

00:43:48I gave a very clear and

00:43:49concise and as always

00:43:51straightforward answer, which

00:43:52is he had been asked by a

00:43:55director to do a favor in

00:43:58supporting the campaign, and

00:44:00he had responded as he felt

00:44:02any good chairman and chief

00:44:04executive officer would.

00:44:06He responded by doing the

00:44:08favor for them.

00:44:09So it seemed to me, my

00:44:12impression from Bob was that

00:44:13he was simply responding to

00:44:15a request from a valued and

00:44:17respected director.

00:44:18Was that director Wendy

00:44:19Graham or Alec Cortellis?

00:44:20Cortellis.

00:44:22Alec Cortellis was then

00:44:24Phil Graham's finance

00:44:25chairman and Wendy's

00:44:26friend.

00:44:27Was Wendy aware or informed

00:44:29of this decision?

00:44:30She wouldn't say.

00:44:31Wendy Graham didn't have to

00:44:35ask IBP to act as it did.

00:44:39Wendy Graham can reasonably

00:44:40assume, as can Phil Graham,

00:44:42that IBP will do that.

00:44:44By virtue, however, of putting

00:44:46Wendy Graham on the corporate

00:44:48board and participating as it

00:44:50did in the straw poll, IBP has

00:44:52established that it's a friend

00:44:53of the Grahams, and one can

00:44:55reasonably assume that

00:44:56politicians are disposed to

00:44:58reward their friends.

00:44:59Senator Graham did very well

00:45:02in the beauty contest.

00:45:03To the surprise of many

00:45:05political observers, he tied

00:45:07the frontrunner, Bob Dole.

00:45:10But Graham wasn't the only

00:45:12candidate who had questions

00:45:13raised about his wife.

00:45:16Hillary Clinton stayed on

00:45:17boards well into her husband's

00:45:19presidential campaign.

00:45:21And then there was that matter

00:45:22of the thousand dollars.

00:45:24What I thought we could afford

00:45:25to invest, I told him a

00:45:27thousand dollars.

00:45:27Her thousand dollar investment

00:45:29gave her a one hundred

00:45:31thousand dollar return, and

00:45:32the question was, was somebody

00:45:34trying to do her husband a

00:45:36favor?

00:45:38You know, not all my trades

00:45:39made money.

00:45:40Some of them lost money.

00:45:43Lamar Alexander's wife, Honey,

00:45:45turned a ten thousand dollar

00:45:47investment in Whittle

00:45:48communications into a three

00:45:49hundred thousand windfall.

00:45:51And then there's Elizabeth Dole,

00:45:55twice a cabinet secretary, and

00:45:57until the campaign head of the

00:45:58American Red Cross.

00:46:00Curiously, while she was there,

00:46:03the Gallo brothers sent the Red

00:46:05Cross their largest cash

00:46:07contribution ever, a hundred

00:46:09thousand dollars.

00:46:11In the case of Bob and Elizabeth Dole,

00:46:13she's such a public person and

00:46:15such a powerhouse in her own right.

00:46:20When they help her, I think they

00:46:22believe that they're helping him.

00:46:26What's new this year in loopholes?

00:46:30Well, many of these loopholes have

00:46:32been around for years.

00:46:34Chuck Lewis has just written a book

00:46:35about money and campaigning called

00:46:37The Buying of the President.

00:46:39Foundations, where you can hide

00:46:42money, millions of dollars can go

00:46:43into a fund, it can be created

00:46:46basically to make you look good

00:46:47as a candidate, and you never have

00:46:49to release the donor information.

00:46:52How do you come out?

00:46:53Do you come out convinced that

00:46:55there is, that elections are in

00:46:57huge part favors for sale, or in

00:47:00tiny part favors for sale, or

00:47:02somewhere in the middle?

00:47:04I think that in huge part.

00:47:07Huge part?

00:47:08Yeah, I was taken aback, actually.

00:47:10I did not realize how expensive

00:47:13things had gotten.

00:47:14This is the most expensive

00:47:15presidential campaign and the

00:47:17most expensive political campaign

00:47:19in U.S. history.

00:47:20The numbers are absolutely off the

00:47:22charts.

00:47:22But just because there's a lot of

00:47:24dollars chasing candidates, does

00:47:26that mean that there's a lot of

00:47:28selfish people trying to turn the

00:47:30system to their own purposes, or

00:47:33couldn't it mean that there's just

00:47:34a lot of wealthy people who want to

00:47:36express broad philosophical issues?

00:47:40I think there are a lot of wealthy

00:47:41people that do want to express broad

00:47:43philosophical issues.

00:47:44I think there are also a lot of very

00:47:46narrow, specific, vested corporate

00:47:48and labor and other vested interests

00:47:51that have very narrow agendas that

00:47:54they want pursued.

00:47:56The presidential campaign is not a horse

00:47:58race or a beauty contest.

00:47:59It's a giant auction.

00:48:01The president of the United States of

00:48:04America, Bill Clinton.

00:48:07This is a Clinton fundraiser in

00:48:09California.

00:48:15Some of these people, of course, are

00:48:16stars, but they're not Clinton's all

00:48:20stars, the ones who've given him the

00:48:22most money over the years.

00:48:24Thank you, Tom Hanks, for introducing

00:48:26Al Gore.

00:48:28Thank you for not introducing me.

00:48:31Chuck Lewis compiled that list, so

00:48:33here is his top five lifetime donors

00:48:36for Bill Clinton, starting at the

00:48:37bottom.

00:48:38So we'll start with number five.

00:48:41Well, number five, we're not going to

00:48:42tell you that.

00:48:43We'll tell you later in the program.

00:48:44Number four, Wilkie, Farr, and

00:48:47Gallagher, which is a law firm.

00:48:49Number three, the Jackson Stevens

00:48:51Group, they're a big business in

00:48:52Arkansas.

00:48:53Number two, a New York teachers union.

00:48:56And number one, Goldman Sachs, which

00:48:59is a Wall Street firm and former home

00:49:01of President Clinton's Treasury

00:49:03Secretary.

00:49:04And now let's do Senator Graham.

00:49:06Again, same thing, top five lifetime

00:49:08donors as of mid-1995.

00:49:10Chuck Lewis's list will start again at

00:49:12the bottom.

00:49:12Number five, First City Bank

00:49:16Corp in Houston.

00:49:18Number four, Boone Pickens, the oil man

00:49:20from Texas.

00:49:21Number three, the Conservative

00:49:23National Committee, that's a

00:49:25lobbying group.

00:49:26Number two, the American Medical

00:49:28Association.

00:49:29And Phil Graham's number one, the

00:49:31National Rifle Association.

00:49:34Now, Phil Graham is famously proud of

00:49:36his ability to raise money, but the

00:49:38fact is it's very hard work because

00:49:40you've got to deal with that $1,000

00:49:43per person limit.

00:49:44The limit has been in place for 20

00:49:47years, and it has not been adjusted

00:49:49for inflation.

00:49:50It has not been indexed, and it should

00:49:53have been.

00:49:53The reason is that if one counts a

00:49:56$1,000 contribution today, considering

00:50:00the value of the dollar in January 1st,

00:50:031975, when that law went into effect, a

00:50:07$1,000 contribution today is worth about

00:50:10$300.

00:50:11And every one of you should be happy

00:50:14and proud that you happen to be alive

00:50:16at this period of profound change.

00:50:20If we do our job, the best is yet to

00:50:24come.

00:50:24Thank you, and God bless you all.

00:50:27So the campaign limits have had the odd

00:50:30effect of forcing politicians to spend

00:50:32more time raising money, because you've

00:50:34got to work three times harder now just

00:50:37to stay even.

00:50:38I don't know if the average American

00:50:41understands this.

00:50:42If you raise $20 million in one year,

00:50:45that's $55,000 a day.

00:50:48Bill Clinton did not start until April.

00:50:51In the first six months he was raising money,

00:50:54he raised in excess of $100,000 a day.

00:50:57Now, you don't do that with backyard

00:51:00barbecues.

00:51:01There are certain people that can give that

00:51:03kind of money and raise that kind of money

00:51:04and pull together events where that kind of

00:51:06money is generated.

00:51:08And this is not a ma and pop type thing.

00:51:11This is a big-time money machine.

00:51:15Remember that five-city campaign trip that

00:51:18President Clinton took on Air Force One?

00:51:20Well, one of his stops was in San Francisco,

00:51:24and the occasion was a fundraiser at the

00:51:27Fairmont Hotel.

00:51:30Good morning.

00:51:31Exciting morning.

00:51:32It is very exciting.

00:51:33Money came to town for a chance to catch a

00:51:36glimpse of the president.

00:51:38And here he is, just behind him, there's

00:51:40Vice President Gore.

00:51:41And he's giving a little bow to Clarence

00:51:43Clemens.

00:51:44The president now will stop and have a few

00:51:46words with his supporters.

00:51:47But now, who's the guy with the bald spot?

00:51:50Shornstein and Ernest Gallo.

00:51:52Ernest Gallo, Bob Dole's single biggest

00:51:55contributor, the man who gave over a million

00:51:57dollars to the Republicans, he's here.

00:52:01It seems that in just three days, Ernest

00:52:03Gallo raised $100,000 for this event.

00:52:06And at this point, he is number five on

00:52:10President Clinton's list of all-time givers.

00:52:12But why?

00:52:14How does the president know this wine guy?

00:52:17Why?

00:52:22Let's go back a few years.

00:52:24It turns out, in the last election, Mr. Gallo

00:52:26had not given to the Clinton campaign until days

00:52:29before the election, when he gave some money to the

00:52:32Democratic National Committee.

00:52:34He'd given heavily to Bush and to the Republicans.

00:52:40But the nifty thing about our system is it's very

00:52:44forgiving.

00:52:44And there are lots of ways to give.

00:52:47So, Ernest Gallo gave $40,000 to the Clinton transition.

00:52:53But what could Washington do for Gallo?

00:53:00Gallo is the biggest wine producer in the country,

00:53:04nearly a billion-dollar-a-year business.

00:53:06And their market share is big and stable, so they need to

00:53:10expand worldwide.

00:53:12And that means marketing their wines to other countries.

00:53:15And guess who helps them pay for commercials like this?

00:53:35Imagine that you're a chairman or a president of a major

00:53:38corporation in this country, and Uncle Sam walks into your

00:53:40office and tells you, I've got a deal for you.

00:53:42Here's the deal.

00:53:44I subsidize your foreign advertising budget in exchange.

00:53:49Well, in exchange, you do nothing.

00:53:50You just get the money.

00:53:54So far, the Gallos have received $30 million under the

00:53:59Market Promotion Program, a piece of legislation pushed by

00:54:03California Agribusiness and originally backed by Senator Pete

00:54:06Wilson and Representative Leon Panetta.

00:54:09Remember them?

00:54:09Both long-time Gallo political favorites.

00:54:13It was passed in 1985 as Dole Amendment 1167.

00:54:23But not everybody in the wine business is happy about this bill

00:54:26because it is structured to reward the biggest producers.

00:54:31Bill McIver is the owner of a small winery in California's

00:54:35Sonoma Valley.

00:54:37I'd look at the MPP as a tax rebate for Gallo, basically.

00:54:44I mean, they get 48% of the funds, and it's really virtually no use

00:54:52whatsoever to small wineries.

00:54:54This is how it works.

00:54:55The government gives its money to the Wine Institute.

00:54:58It's a trade organization that critics say is dominated by the biggest producers,

00:55:04led by Gallo.

00:55:06Nothing comes automatically.

00:55:08You have to be good at what you do.

00:55:11And the funds that you receive are based on your performance.

00:55:14And I get back to the original equation.

00:55:16You give the funds to the people who show that they best know how to use it

00:55:19and are successful.

00:55:21And that is as American as anything else.

00:55:24Frankly, it infuriates me that the American people is giving Gallo

00:55:30that has revenues of almost a billion dollars a year,

00:55:35850 to a billion dollars a year,

00:55:37that the taxpayer would fund something like this.

00:55:41It's a travesty as far as I'm concerned.

00:55:46Last Labor Day, when President Clinton came to town,

00:55:49he stopped for a few hours in California's Central Valley.

00:55:52He met with workers.

00:55:54And with his chief of staff, Leon Panetta,

00:55:56he met with ranchers and farmers.

00:55:58Then he went behind closed doors for a private meeting with Ernest Gallo.

00:56:05We don't know what they talked about except for official statements

00:56:08which say they discussed NAFTA and the threat of low-cost Chilean wines.

00:56:13But the next month, the ad promotion program was reauthorized

00:56:18with President Clinton's enthusiastic support

00:56:21and for good measure, with an increase of 30%.

00:56:25But what if you're in business and you don't want the government's help?

00:56:36Outstanding.

00:56:40In the hills of Northern California,

00:56:42there's a group of people who want to keep their distance from Washington.

00:56:46We all have a hobby in Silicon Valley.

00:56:48Mine happens to be wine.

00:56:50And typically, the hobby is pursued with the same energy as your life.

00:56:55T.J. Rogers is one of the new entrepreneurs

00:56:58who've made their fortunes in Silicon Valley.

00:57:00You go on into Saturday and Sunday,

00:57:02and then you do something else on Saturday and Sunday with equal intensity.

00:57:05Yes, I think in this valley, people are a lot like me.

00:57:11They are proud of the fact that they haven't needed government favors or government protections.

00:57:17We rarely, if ever, discuss politics

00:57:19because politics, politicians in Washington don't matter to us.

00:57:23They are a burden, a drain in the economy.

00:57:26We create wealth, jobs, and money here.

00:57:29They're somebody far away and hopefully will stay far away.

00:57:31Historically, candidates don't raise a lot of money in Silicon Valley.

00:57:35David Barham was chief financial officer at Apple Computers.

00:57:38You don't wake up in the morning thinking,

00:57:39gee, I'd like to give it to a candidate.

00:57:41That's just not the way it is.

00:57:44Bill Clinton walked into this rarefied atmosphere

00:57:47looking for votes, endorsements, and money.

00:57:50So to get them to give, they had to really believe in the ideas of this guy

00:57:56and that he needed the money in order to get his message out.

00:58:00They could understand that because all of us in those companies were marketing products

00:58:05and we knew that in this world, you have to spend some money to get your message out.

00:58:10To get the money, candidate Clinton went to high-tech dealmaker Sandy Robertson.

00:58:16Sandy Robertson runs Robertson-Stevens.

00:58:18He's an investment banker.

00:58:20He has raised $250 million for the company.

00:58:23So he called me and said, you ought to come up and talk to Clinton.

00:58:26He may be president and he's here to listen to what Silicon Valley thinks ought to get done in Washington.

00:58:31Great idea. No.

00:58:34It's always difficult raising money and there's a fairly large ticket to come to that.

00:58:38Got another letter. Refused again.

00:58:41Got a personal phone call from an investment banker in San Francisco.

00:58:44Refused again.

00:58:45It's not easy.

00:58:47Called my significant other to have TJ come up.

00:58:52Called me again.

00:58:52Hey, why don't you want to talk to candidate Clinton?

00:58:54He might be the president. He's here to listen.

00:58:57So I finally got convinced.

00:58:59Then the next day I got the little letter.

00:59:01Thank you for coming to talk to candidate Clinton.

00:59:03Please enclose your check for $1,000.

00:59:05So I wrote with my red pen, you know, NFW on his invitation.

00:59:09It sent it back to him.

00:59:10Just that.

00:59:11No friggin' way.

00:59:12But Robertson put together a major fundraiser anyway.

00:59:16During the campaign, we had about 135 people in the room,

00:59:21all from Silicon Valley or the biotechnology community,

00:59:24and raised about $400,000 for his campaign.

00:59:27I think there were $20 billion of sales represented in the room.

00:59:32We all had a meeting, a private meeting with the president,

00:59:35around a great big mock-up of a computer chip.

00:59:38It was a very free-form discussion of what the issues were.

00:59:42There were two or three questions that they wanted to get clear

00:59:44before they would finally agree to support it.

00:59:47And then everyone who wanted to walked out on stage and endorsed him.

00:59:51I'm very impressed about the responsiveness of the campaign.

00:59:57And frankly, it's very refreshing, and I'm enthusiastic about the process.

01:00:01It was led by John Young of Hewlett-Packard and John Scully of Apple.

01:00:06It was a pretty exciting, interesting day.

01:00:08I think it made just an enormous difference in the campaign.

01:00:12When candidate Clinton became president,

01:00:17at first there seemed to be a happy consensus.

01:00:22We wish you a Merry Christmas.

01:00:25We wish you a Merry Christmas.

01:00:27We wish you a Merry Christmas and a Happy New Year.

01:00:33Silicon Valley believed that it would build the backbone of the information superhighway.

01:00:38But that's not what the new vice president had in mind.

01:00:41He wanted the government to build an information superhighway

01:00:44the way his father had helped build the interstate highway system in the 1950s.

01:00:51Superhighways, Futurama's free-flowing channels of concrete and steel.

01:00:58But these wide lanes of reality actually measure out...

01:01:03That's not what the guys in Silicon Valley had in mind.

01:01:06The concept that Al Gore could build anything is absurd.

01:01:09You know, the average high school student in Sunnyvale

01:01:12knows more about technology than Al Gore does.

01:01:15Secondly, why should the government be competing against private companies?

01:01:23During the presidential transition in Little Rock,

01:01:25the new administration brought business leaders to town.

01:01:29John Scully from Apple came.

01:01:33He's here looking after Silicon Valley's interests.

01:01:38It becomes a sort of get-together for the establishment.

01:01:43They both privately and publicly press for their interests.

01:01:48The vice president and the head of AT&T had a little flurry.

01:01:53Probably only harsh words back and forth during the whole couple days of the conference.

01:01:58Because the president of AT&T said, no, this should be in the private sector.

01:02:02I think the government should not build and or operate such networks.

01:02:09I'd like to briefly clarify one point that you made.

01:02:13It does seem to me that government ought to play a role in putting in place that backbone,

01:02:18just as no private investor was willing to build the interstate highway system.

01:02:23You didn't mean to disagree with that view when you said government shouldn't play a role, did you?

01:02:30Yes, I may disagree.

01:02:35There's further discussion.

01:02:38Not now.

01:02:38I was hoping we'd have one disagreement.

01:02:41Scully and Silicon Valley knew they would need to work on the vice president,

01:02:45and they would have help.

01:02:47Clinton appointed one of their own, Apple executive Dave Barham, remember him?

01:02:51To be deputy secretary of commerce.

01:02:54What they really get out of this is the opportunity to pick up the telephone

01:02:59or in some other way communicate with somebody in the White House or in the administration somewhere

01:03:06who understands their issues and is willing to make sure that they're considered in a very serious way.

01:03:12And then in a private dining room of a Silicon Valley restaurant, the CEOs went to work.

01:03:17While eating salmon and asparagus, they lobbied their new friends in the administration.

01:03:23We had a dinner with about 25 of us and the president and the vice president.

01:03:28The two of them indicated that evening that maybe they should step back from government funding

01:03:33and maybe just set standards, which was very much encouraged then by the executives in the room.

01:03:39And I think at that evening, particularly Gore, who had been talking about it,

01:03:45came back to the private sector, at least in his thinking.

01:03:48And I'm sure he publicly said it, but you could see his mind almost change that night.

01:03:54While Robertson may have thought Gore changed his mind,

01:03:57publicly the vice president continued to argue for government financing.

01:04:02In March, Gore stressed the government's role would still be big.

01:04:06Thank you very much.

01:04:09But then, on December 21st, Vice President Albert Gore said this.

01:04:15Because unlike the interstates, the information highways will be built, paid for, and funded principally by the private sector.

01:04:23Gore delivered this speech on December 21st.

01:04:27And curiously, the Federal Election Commission records that on that day,

01:04:31The Democratic National Committee got a $15,000 contribution from Sprint, the telephone company,

01:04:40and a $10,000 contribution from U.S. West,

01:04:44and a $50,000 contribution from MCI,

01:04:48and a $15,000 contribution from Ninex,

01:04:51and the next day, another $20,000 contribution from MCI,

01:04:55and $10,000 more from Ninex.

01:04:58Now, that could just be applause.

01:05:05Thank heavens you've seen the light.

01:05:08An illegitimate kind of applause.

01:05:09Or it could be a payoff.

01:05:11What do you suggest?

01:05:12I think it was a reward of sorts by the companies.

01:05:15I'm not saying necessarily that Clinton and Gore,

01:05:17I think they didn't have much choice.

01:05:19I think they overpromised, frankly.

01:05:20But I do think it was a reward.

01:05:23It was a way of saying,

01:05:24you did the right thing, we're very pleased.

01:05:26The reason I think this is, we have looked at soft money payments over two or three years.

01:05:31And usually when you see a big chunk of money, it didn't come in one check.

01:05:34We found MCI made 23 checks over a two-year period,

01:05:38and the average check was a few thousand dollars.

01:05:41But on this day, it was $50,000.

01:05:44And so there's more to it than just happened to be a coincidence.

01:05:47What's going on? If you suddenly decide to send $50,000 in the mail on the day of his speech,

01:05:52what are you saying?

01:05:54I think it's a financial version of a big wet kiss.

01:05:58Why don't we get all of the council members over for a little group photo before we...

01:06:05Then, a new committee is formed.

01:06:08They will advise the president on the superhighway,

01:06:11and their members have been chosen by Ron Brown, Secretary of Commerce.

01:06:16Companies like Bell Atlantic, MCI,

01:06:21people who want to build the superhighway.

01:06:24Here's John Scully.

01:06:25The committee will deliver a report to the president

01:06:30detailing who should build what for the superhighway.

01:06:34But not everyone is thrilled with who got on the committee.

01:06:38Jamie Love works for Ralph Nader.

01:06:41There's an assumption here that all the smart people about the development of the NII

01:06:45are the captains of all these big industry groups.

01:06:48And I think that's really insulting to people that work in this field,

01:06:51that know all kinds of people, that are really brilliant people,

01:06:53that have all kinds of great insights to make,

01:06:55that are never really put on these big advisory boards, and ought to be.

01:06:58I mean, these aren't the best and the brightest people for the NII Advisory Council.

01:07:02These are the biggest and the richest.

01:07:03It's not the same thing.

01:07:06And two-thirds of the board are Democratic Party contributors.

01:07:10Some on the list.

01:07:11AT&T gave over $1.5 million,

01:07:15West Publishing more than $500,000,

01:07:17and MCI kicked in over $425,000.

01:07:21We look at it as a fundraising vehicle for the Democratic National Committee.

01:07:25That is to say, people that give a lot of money to the Democratic National Committee

01:07:28more or less could buy a seat on the NII Advisory Council.

01:07:32You know, I was involved in the discussions.

01:07:35I mean, we talked about who was going to be on it.

01:07:36And it was not driven by who gave contributions.

01:07:39Indeed, Jamie Love of the Nader Organization and other critics were invited to a private get-together.

01:07:47It was clear right off the bat that the CEOs from all the companies

01:07:50were really intimate terms with the staff of the White House on everything.

01:07:54I mean, it was like, good to see you.

01:07:56How's it going?

01:07:57And there was a lot of talking in the corners about this and that,

01:07:59and all kinds of deals going on.

01:08:01The rest of us felt like we were in there, like, looking for autographs or something, you know.

01:08:04Maybe going to bring out the camera and take a few pictures

01:08:07and see what the inside of the White House actually looks like.

01:08:10And, you know, the difference of access and intimacy is really important.

01:08:16It does seem that there's a kind of barter culture in Washington.

01:08:20If the government does something nice for a business,

01:08:22then the executives of the business say,

01:08:24well, we'd better give them a tip.

01:08:25As if the whole thing were about money.

01:08:28And sometimes it gets, well, rather frank.

01:08:31Here is a memorandum distributed to big donors by the Democratic Party.

01:08:36When the president saw this memo, he said, stop it.

01:08:39It was circulated, however, by the Democratic National Committee.

01:08:42And it says, if you give us a minimum of $100,000, here is what you get.

01:08:48And it's arranged just like a menu.

01:08:50You get two events with the president in Washington, D.C.,

01:08:56two events with the vice president.

01:08:59I guess that could be anywhere, though.

01:09:00One dinner with high administration officials.

01:09:04Honored guest status.

01:09:06That means I guess you get to go to a White House dinner.

01:09:08And then, now this is an odd one, annual economic trade missions.

01:09:12What could that mean?

01:09:14Well, we found out.

01:09:15This one here was taken in the cabinet room with the vice president and the president

01:09:24with 25 CEOs on our way to China with Ron Brown a year ago, August.

01:09:30Remember high-tech dealmaker Sandy Robertson?

01:09:33People are pretty informally dressed because we're about to hop on an airplane

01:09:35for a 23-hour flight to Beijing.

01:09:41The old Air Force One.

01:09:43They call her Queenie.

01:09:44She flew Reagan to Reykjavik, Bush to the Gulf,

01:09:48and she'll fly Ron Brown and top executives all over the world.

01:09:52When the secretary of commerce gets off an airplane,

01:09:55the airplane has emblazoned on it the words United States of America.

01:09:59And I walk down to the tarmac accompanied by 25 or 30 chief executive officers

01:10:05of American companies, large and small.

01:10:08That reverberates throughout that country.

01:10:10And yes, it makes a difference.

01:10:11And yes, it has an impact.

01:10:12And yes, it helps create economic growth.

01:10:15They call it the Brown Express.

01:10:17And 191 American executives have been on 14 trips.

01:10:22Trade missions have been highly publicized.

01:10:24He's gone overseas and in fact promoted U.S. business,

01:10:27not generally, but for those individuals who have given those large contributions.

01:10:32This is a distortion, because when you help one company,

01:10:35when you help one competitor in the marketplace,

01:10:38by definition, you're hurting another company that's competing against that company.

01:10:42And that's not a proper use of government resource.

01:10:45Larry Klayman is a Washington lawyer who's been looking into these trips using the Freedom of Information Act.

01:10:51He was able to get boxes of records and memos from Brown's trips,

01:10:5430,000 pages in all.

01:10:56You find communications from lobbyists in Washington, D.C., into Secretary Brown's office,

01:11:04into the White House, saying,

01:11:06my client so-and-so has donated this amount of money to the Democratic National Committee.

01:11:10My client so-and-so is a personal friend of President Clinton

01:11:14and plays a role on this particular fundraising committee.

01:11:17But there was one document in particular that was very interesting.

01:11:20It was written by an individual of Entergy Company, which is from Arkansas.

01:11:25And in that memorandum, they quote a key aide of Secretary Brown.

01:11:29And this individual, Jude Kearney, is quoted as saying,

01:11:32I am a political appointee, and I am here to choose those who are politically connected.

01:11:37This, to me, was the foremost smoking gun in all of these documents,

01:11:41which laid out a basic plan to choose corporate executives based on political connections.

01:11:46All anyone has to do is look at the evidence, look who goes on the trips,

01:11:50check their party registration, see whether many more of them,

01:11:54I would suspect that about 80% of the CEOs that go with me are Republican,

01:11:58so that certainly is not a criteria for their selection.

01:12:01Commerce official Jude Kearney would not return our calls,

01:12:04but officials from Entergy stand by their memo.

01:12:07But their chairman, Edwin Lutberger, told us that political contributions

01:12:11played no part in our decision to participate.

01:12:16In all, 25 executives boarded Brown's plane for China.

01:12:24This is the Secretary's cabin. Look, he's got a desk.

01:12:29And this, this I guess must be the TV lounge.

01:12:34Now let's stroll down the aisle.

01:12:36Here is Edwin Lutberger's seat from Entergy.

01:12:39Entergy has contributed $216,250 to the Democrats.

01:12:45This is Bernard Schwartz's seat from Loral.

01:12:48They've given $259,775.

01:12:54Seat 29 here.

01:12:56This is a window.

01:12:56Ray Smith of Bell Atlantic, $236,625 to the Democrats.

01:13:01Next up, Robert Denham of Salomon Brothers, whose firms have given $109,722.

01:13:11And according to the seating chart,

01:13:13Lodrick Cook of Arco sat here,

01:13:15and Arco was given $646,792.

01:13:20The rewards of commercial diplomacy.

01:13:27Brown is the first U.S. Cabinet official to visit Beijing since May,

01:13:30when the U.S. stopped leaving.

01:13:31Everybody seemed to be having an excellent time.

01:13:39And Secretary Brown insists these trips are very good for U.S. business.

01:13:44He claims to have helped close deals worth $5 billion on this one jaunt.

01:13:49Well, maybe yes, maybe no,

01:13:51but some reports complain about favoritism in the selection process.

01:13:56The Wall Street Journal and others have looked into this.

01:13:58If you read the articles, they have found no evidence of anything like that.

01:14:02As a matter of fact, the worst thing that the article said

01:14:05was that a third of those who went

01:14:07had been contributors to the Democratic Party or Democratic candidates.

01:14:12But it didn't tell you that that entire third also contributed to the Republican Party

01:14:15and Republican candidates, as most major company chief executive officers do.

01:14:22Well, Secretary Brown is right and wrong.

01:14:26In fact, we counted more than two-thirds of the CEOs on this trip

01:14:31as major Democratic contributors.

01:14:34He is right, though, that all of them gave to Republicans as well.

01:14:39One of the things that's true of these companies,

01:14:42and I'm sure that Secretary Brown would say this in his defense,

01:14:46is that these companies give to both political parties.

01:14:49The issue is that they also give to the Democratic Party

01:14:52when they need a favor,

01:14:53and the Democratic Party just happens to be in power at this time.

01:14:56But if the tables are turned and if the Republicans are elected,

01:14:59you'll find that they become big givers to the Republicans as well.

01:15:03And one can ask the question,

01:15:04does our system need to be reformed?

01:15:06The answer, obviously, is yes.

01:15:09In the end,

01:15:11having seen everything we've seen,

01:15:13how does one go about fixing this?

01:15:17Well, the difficulty is that there's no obvious easy fix.

01:15:21What I think has to happen,

01:15:23if everything goes well for this country,

01:15:25is that developments come really on three dimensions.

01:15:29The first is that we change the lobbying and campaign finance laws

01:15:33and try to tighten them down.

01:15:35Again, after all those previous tightenings.

01:15:38But it won't be easy to do,

01:15:39as long as you're dealing with the Republican and Democratic parties,

01:15:42because basically what they want to do

01:15:44is create loopholes and sieves and such.

01:15:47So I think if the party system is starting to weaken

01:15:49and we're getting the rise of independents who make this an issue,

01:15:53it increases the pressure on the party system to respond

01:15:55and not just create another flimflat.

01:15:59Now, the last ingredient is,

01:16:00I think we have to start moving power out of Washington.

01:16:03The more decisions that are made by ordinary Americans,

01:16:06the more you take away from Washington.

01:16:08The people cannot be called up by the Washington lobbyists.

01:16:13Real reform of democracy

01:16:15must begin by completely breaking the connection between money and politics.

01:16:19Bill Bradley has announced that he's leaving the Senate,

01:16:22but he is still campaigning.

01:16:24Here he is at Harvard.

01:16:25His cause was campaign finance reform.

01:16:28We have to start understanding what has happened to the past efforts

01:16:32to free politics from the grip of money.

01:16:34And his idea?

01:16:35He wants to make it impossible for people to give money directly to politicians.

01:16:40He wants a large pool of money that they all divvy up.

01:16:43But there are a lot of details.

01:16:46You see, one of the problems with fundamental campaign finance reform,

01:16:49or with campaign finance reform as we have known it,

01:16:52is that it becomes so complicated

01:16:55that those who oppose it

01:16:58have no political liability

01:16:59because those who support it

01:17:01can't explain it convincingly enough

01:17:03to develop the issue.

01:17:05And I think that campaign finance reform,

01:17:09money in politics,

01:17:11is a little bit like ants in your kitchen.

01:17:13Either you've got to block all the holes

01:17:15so none of them can get in,

01:17:17or some of them are going to get in.

01:17:18So you simply have to take the money out of politics

01:17:23and have fundamental, bold campaign finance reform.

01:17:27Bradley's notion would make this guy's campaign illegal.

01:17:30I'm here today to announce

01:17:32that I'm running for president of the United States.

01:17:35Steve Forbes has so far spent

01:17:37approximately $15 million, mostly on ads.

01:17:41Former Senator Gordon Humphrey.

01:17:44I'm supporting Steve Forbes for president.

01:17:47Steve has Ronald Reagan's conservative principles...

01:17:49The Supreme Court has ruled

01:17:51that he has a First Amendment right

01:17:53to spend as much of his money as he pleases.

01:17:55But some of his opponents

01:17:57would like to take that right away.

01:17:59It seemed to me that it made no sense

01:18:01to say that there was a constitutional right

01:18:05to spend as much of your money

01:18:06as you wanted to to get yourself elected,

01:18:09but everybody else was limited to $1,000.

01:18:13And now, when I last looked,

01:18:16someone was trying to buy the White House,

01:18:18and apparently it's for sale.

01:18:20Could you buy the presidency, do you think?

01:18:23Is that possible?

01:18:24No, it's not possible for me to buy the presidency,

01:18:26but it may be possible for Steve Forbes

01:18:28to buy the presidency.

01:18:29He's making a valiant effort.

01:18:32And the latest polls show him

01:18:35moving up very considerably.

01:18:38I'm Steve Forbes.

01:18:40The politicians are getting nervous.

01:18:42The polls are getting closer.

01:18:44It's all those ads.

01:18:45Steve can bury you in them.

01:18:46The presidential crusade to change America.

01:18:49The politicians will try to stop us,

01:18:51but they can't.

01:18:52We want a balanced budget.

01:18:53And when I was running for president

01:18:55a few months ago in New Hampshire

01:18:57and was on a talk show, an interview show,

01:19:00it was interrupted for a commercial.

01:19:03And there, right in the middle

01:19:04of my important public discourse,

01:19:06appeared Steve Forbes' commercial.

01:19:08I had just been talking about the flat tax,

01:19:11which I've done a ton of work on,

01:19:13and he came on with so many

01:19:1430-second soundbite commercials

01:19:16that the people of New Hampshire

01:19:18knew about Forbes' flat tax,

01:19:19didn't know a thing about

01:19:20Arlen Spector's flat tax.

01:19:22It didn't come from Cerebrum.

01:19:24It came from the pocketbook.

01:19:26From Pennsylvania,

01:19:27Senator Arlen Spector!

01:19:29Sour grapes, maybe,

01:19:32but every high-profile politician

01:19:34now agrees that some things

01:19:36have got to change.

01:19:39Change the limits,

01:19:40change the rules,

01:19:41change the primaries,

01:19:43change the ads,

01:19:43change enforcement.

01:19:45You've got to change something.

01:19:48What about the Frank Capra solution?

01:19:50You get rid of all those bad people,

01:19:52and you put in decent,

01:19:54honest, intelligent,

01:19:56courageous politicians.

01:19:58Mr. Clinton goes to Washington,

01:20:00ran against Washington

01:20:02in the election,

01:20:04arrives there,

01:20:05and it's like iron filings

01:20:07hitting an electromagnet.

01:20:09When Jimmy Stewart's

01:20:11fellow went to Washington

01:20:13in the 1930s,

01:20:15it was a different city.

01:20:17You could park your convertible

01:20:19under the White House portico

01:20:20and put up the top.

01:20:22You could walk into

01:20:23your senator's office.

01:20:24K Street didn't exist

01:20:25except as a bunch of brownstones.

01:20:27This is a totally different Washington.

01:20:30Sixty years later,

01:20:31that's a dream.

01:20:32We saw it become a dream

01:20:33with Clinton,

01:20:33who ran against all this,

01:20:35came in there,

01:20:36and was just swallowed up

01:20:37and became a part of it.

01:20:38Please applaud.

01:20:39I think this is...

01:20:40To have the president here

01:20:41is a good thing.

01:20:45And I think you were suggesting,

01:20:46I've never heard this proposed before,

01:20:48that maybe if we had

01:20:49sort of a blue-ribbon commission

01:20:51of people that really had

01:20:52respect and integrity,

01:20:54that would look at the whole

01:20:55lobbying political process...

01:20:56Look at the...

01:20:57Is that what you want?

01:20:58I thought you were talking

01:20:58about health care reform.

01:20:59No.

01:20:59No.

01:21:00You want to do it on lobby reform?

01:21:02In a heartbeat.

01:21:03I accept.

01:21:04For the problem,

01:21:04Mr. President?

01:21:05Because otherwise,

01:21:07we cannot pass lobby reform

01:21:09or campaign finance reform

01:21:11or anything else.

01:21:11I would love to have

01:21:12a bipartisan commission on it.

01:21:14That's our only chance

01:21:15to get anything passed.

01:21:17I accept.

01:21:18Let me ask this.

01:21:18Let's shake hands right here

01:21:19in front of everybody.

01:21:20How's that?

01:21:21Is that a pretty good deal?

01:21:22I accept.

01:21:23I'll tell you,

01:21:23if every question is this productive...

01:21:25Now, can I just take one minute,

01:21:26Mr. President,

01:21:27and talk about the Medicare thing?

01:21:28Because I do think...

01:21:29They shook hands last June.

01:21:32And when they came back to Washington,

01:21:33they talked about

01:21:34a blue-ribbon commission

01:21:35for a while.

01:21:37And then they didn't.

01:21:39If it's not so surprising

01:21:41that the politicians

01:21:42aren't in a rush

01:21:43to reform themselves,

01:21:45it is odd

01:21:46when you hear

01:21:46the oldest dog

01:21:47in the neighborhood

01:21:48start to worry.

01:21:49I think there is

01:21:50a lack of confidence.

01:21:52I think there is

01:21:53a suspicion

01:21:54by people

01:21:55that their interests

01:21:56are being advantaged,

01:21:58disadvantaged

01:21:58by financial contributions

01:22:01from rich people.

01:22:03and special interests

01:22:05with narrow...

01:22:07or narrow special interests.

01:22:08And I don't think

01:22:09that was going to stop

01:22:10until we reformed

01:22:11the campaign finance

01:22:12process in this country.

01:22:15That's not my opinion.

01:22:16That's a historical fact.

01:22:18And you don't need

01:22:19a 45-minute

01:22:20or a 90-minute show.

01:22:21That is a fact.

01:22:22that is a fiction-based

01:22:37visit Frontline

01:22:39on the World Wide Web

01:22:40via PBS

01:22:41at this address.

01:22:43Go online with Frontline

01:22:45to explore further

01:22:46the world of money

01:22:47and politics,

01:22:48profiles of some

01:22:49of the major players,

01:22:50excerpts from Frontline's

01:22:52interviews,

01:22:53the money charts

01:22:54of who gave what

01:22:54and who got what,

01:22:56and a citizen's guide

01:22:57to get you more involved.

01:22:59And then please

01:23:00give us your feedback.

01:23:01It's all at the

01:23:02Internet address

01:23:02on your screen.

01:23:04Off the net,

01:23:04you can also register

01:23:05an opinion

01:23:06by fax

01:23:07at 617-254-0243

01:23:10or write to this address.

01:23:20Next time on Frontline,

01:23:22a shocking murder.

01:23:24We had a shooting

01:23:25at an abortion clinic

01:23:26in the 1,000...

01:23:26The victim.

01:23:27My name is Shannon Lowney.

01:23:28The accused gunman.

01:23:30I'm not insane.

01:23:31I'm not incompetent.

01:23:33He said,

01:23:33Mom,

01:23:34I was the thief

01:23:35on the cross of Jesus.

01:23:36An absolute deformity

01:23:38of Christianity.

01:23:40In the fevered climate

01:23:41of a holy war,

01:23:42two lives tragically collide.

01:23:45Murder on abortion row.

01:23:47Next time on Frontline.

01:23:54You're the Chiquita banana guy?

01:23:58Gee, sir,

01:23:59without the fruit on your head,

01:23:59I don't even recognize you.

01:24:04Why does the president

01:24:06know the banana guy?

01:24:08Oh,

01:24:11this is really wonderful.

01:24:13Oh,

01:24:13this is really wonderful.

01:24:24Yess Synod原

01:24:26You know

01:24:27it's really wonderful.

01:24:28You do

01:24:29like

01:24:29with

01:24:31AKE

01:26:01By the Florence and John Schumann Foundation, and by the John D. and Catherine T. MacArthur Foundation.

01:26:07The Democracy Project.

01:26:17For videocassette information about this program, please call this toll-free number, 1-800-328-PBS1.

01:26:29This is PBS.

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