The opinion of the court was delivered by: Vanaskie, Chief Judge.
This action under 2 U.S.C. § 437h challenges the
constitutionality of provisions of the Federal Election Campaign
Act ("FECA" or "Act"), 2 U.S.C. § 431, et seq., which ban
corporate contributions to candidates for federal elective
office, 2 U.S.C. § 441b (the "corporate contribution ban"),
and prohibit making campaign contributions in the name of another
person, 2 U.S.C. § 441f (the "conduit contribution ban").
Section 437h of Title 2 U.S.C. assigns to the en banc court of
appeals the role of decision maker on constitutional challenges
to FECA provisions, with the district court's task being
relegated to determining, in the first instance, whether the
constitutional challenge is frivolous. See California Med. Ass'n
v. FEC, 453 U.S. 182, 193-94 n. 14, 101 S.Ct; 2712, 69 L.Ed.2d
567 (1981). If the issues presented are not frivolous, the
district court is to make findings of fact and certify the issues
to be resolved to the appellate court. See Buckley v. Valeo,
519 F.2d 817, 818 (D.C.Cir. 1975) (en banc) (per curiam) (remanding
to district court for findings of fact before reaching merits).
Plaintiff Renato P. Mariani's constitutional challenges to the
corporate and conduit contribution bans arise in the context of a
criminal prosecution against him and others in connection with
contributions made to several candidates for federal elective
office, including the presidential candidacies of Bob Dole and
Bill Clinton. Essentially, the indictment in question charges
that between August of 1994 and December of 1996, Mariani, who
was then president of Empire Sanitary Landfill, Inc. ("Empire")
and Danella Environmental Technologies, Inc. ("Danella"), as well
as other officers of Empire and Danella, used various employees
and others associated with Empire and Danella as conduits for
contributions to the campaigns of Dole, Clinton and others, with
the ultimate source of the campaign contributions being Empire's
Mariani contends that the ability of corporations to make
contributions to political parties and political action
committees ("soft money") in unlimited amounts undermines the
justification for the corporate contribution ban —
eliminating corruption and the appearance of corruption arising
from financing campaigns from large aggregations of wealth
embodied in corporate treasuries. As explained by Mariani:
Because a statute that limits First Amendment interest
(as FECA concededly does) can only survive the strict
scrutiny imposed by law if it directly advances a
compelling state interest in a narrow and precise way,
. . . the easy availability of the elephantine soft money
loophole leaves the statute one that simultaneously —
and thus unconstitutionally — limits First Amendment
interests and fails directly to advance its goals.
(Brief in Opposition to Defendants' Motion to Dismiss, Dkt. Entry
32 at 6 (emphasis in original).)
By Memorandum and Order filed on March 25, 1999, I determined
that Mariani's challenge to the corporate contribution ban was
not legally frivolous. In making this determination, I observed
that "Mariani has presented facts on which to base a rational
argument that the ostensible purposes
of a ban on corporate contributions to candidates for federal
elective office — eliminating the corruption and appearance
of corruption resulting from corporate contributions to
individual candidates, see, e.g., FEC v. National Right to Work
Comm., 459 U.S. 197, 207-08, 103 S.Ct. 552, 74 L.Ed.2d 364 (1982)
— is completely undermined by the allowance of `soft money'
contributions by corporations." (Id. at 4.) Because the challenge
to the corporate contribution ban was not frivolous, I declined
to make a separate determination as to the challenge to the
conduit contribution ban, finding that interests of judicial
economy and expedition militated against such a separate
determination. Id. at 9 n. 3.
Having decided that this action is not frivolous, I must now
make findings of fact pertinent to the issues to be certified to
the Third Circuit for en banc resolution. In connection with this
endeavor, the parties were directed to submit proposed findings
of fact following the completion of pertinent discovery.
As a result of the process established by Court Order, the
parties have stipulated to 117 proposed findings of fact and
agreed to the inclusion of 279 documents in the evidentiary
record for this case. See Joint Stipulation of Facts filed on
July 26, 1999, Dkt. Entry 53. The United States and
intervenor-defendant Federal Election Commission ("FEC") (referred to
jointly as the "Government"), submitted 36 separate proposed
findings of fact, a number of which are admitted by Mariani. In
addition to the 117 findings of fact to which he has stipulated,
Mariani has also proposed 468 additional findings of fact. In
addition to the 279 documents to which the parties had
stipulated, Mariani has also filed "Supplemental Exhibits."
I have carefully reviewed the parties' submissions and find
that many proposed findings, particularly those that are not
disputed as to factual accuracy, may be adopted verbatim.*fn1 A
number of proposed findings, particularly those that merely quote
or restate another person's testimony or statement, however, are
not appropriate as findings of fact.*fn2 As argued by the
Government, a number of Mariani's proposed findings are also
redundant and have not been adopted for that reason.*fn3
While both the United States and FEC have agreed to the
accuracy of an overwhelming majority of the remainder of
Mariani's proposed findings, they have contested the relevancy
and materiality of all but six of Mariani's factual assertions.
The United States and/or the FEC have also objected to particular
findings on the grounds that the evidence proffered by Mariani in
support of particular assertions is not admissible. Examples of
purportedly inadmissible evidence include documents that had been
filed by the FEC in other litigation; an FEC Notice of Proposed
Rulemaking; the Minority Report of the Final Report of the
Committee on Governmental Affairs: Inrestigation of Illegal or
Improper Activities in Connection With 1996 Federal Election
Campaigns, S.Rep. No. 105-167 (1998) [Joint Exhibit ("JEx.")]
21;*fn4 statistics from a study
conducted by the Center for Responsive Politics; and testimony of
several witnesses, including former United States Senator Alan K.
Some objections have merit; for example, hearsay objections
where Mariani is relying on out of court statements for the truth
of the matter asserted.*fn5 Generally speaking, however, the
Government's objections are meritless. Indeed, only a few of the
particular objections warrant any substantial discussion. Before
proceeding to making my findings of fact, I will briefly explain
my rulings on evidentiary objections.
RULINGS ON EVIDENTIARY OBJECTIONS
A. Relevance and Materiality
The Government contends that in light of its concession "that
soft money donations, and expenditures of soft money on issue
advertisements and party-building activities, may influence
federal elections to some degree, no evidentiary record, or at
least not the incredible detail regarding those activities
proposed by plaintiff (particularly the witness statements and
expert testimony), is necessary to decide whether the existence
of soft money donations and expenditures renders sections 441b
and 441f unconstitutional." Joint Response to Plaintiff's
Proposed Findings of Fact, Dkt. Entry 69, at 2-3. The Government
thus contends that all but 6 of Mariani's 585 proposed findings
are irrelevant and/or lack sufficient probative value. The
Government makes this argument despite having stipulated to 117
of Mariani's 585 separate statements of fact and notwithstanding
the fact that it does not contest the factual accuracy of the
overwhelming majority of Mariani's assertions.
Mariani's non-frivolous constitutional challenge concerns the
impact of corporate soft money contributions on federal elections
and the public's perception of the influence of such
contributions. Any evidence that has a tendency to prove that
impact and/or the public's perception of the influence of such
soft money contributions is plainly relevant. FRE 401; Failla v.
City of Passaic, 146 F.3d 149, 159 (3d Cir. 1998).
The Government does not seriously contest the obvious fact that
the evidentiary materials tendered in this case do indeed have a
tendency to show the influence of soft money contributions and/or
the public perception of those contributions. Instead, the
Government essentially maintains that the corporate contribution
ban is unassailable in light of existing case law precedents. As
pointed out by Mariani, the Government is essentially rehashing
arguments I considered in determining that Mariani's claims are
non-frivolous. Now that this threshold question has been answered
in favor of Mariani, the Government's efforts to avoid findings
of fact pertinent to the existing political contribution scheme
is unavailing. The general objections of irrelevance and
immateriality are, therefore, overruled.*fn6
The Government has argued in the alternative that, rather than
making any findings of fact, I should simply certify a
documentary record to the Court of Appeals, thereby allowing it
in the first instance to draw factual conclusions from the
voluminous record. While this proposal has some attraction, it is
inconsistent with what I understand to be the role of the
district court in this legislative review mechanism. Because it
is incumbent upon the district judge to make findings of fact,
Bread Political Action Comm. v. FEC, 455 U.S. 577, 580, 102 S.Ct.
1235, 71 L.Ed.2d 432 (1982); Khachaturian v. FEC, 980 F.2d 330,
331 (5th Cir. 1992) (en banc) (per curiam); Buckley v. Valeo,
519 F.2d 821 (D.C.Cir. 1975) (en banc) (per curiam), the Government's
request that I simply certify a documentary record must be
B. FEC Filings in Other Cases
Also without merit is the objection interposed by the United
States to every fact proffered by Mariani that relies upon the
FEC's submissions in other litigations. Mariani has tendered a
number of proposed findings that are based upon filings made by
the FEC in cases pending in other jurisdictions pertaining to the
impact of soft money contributions. Notably, the FEC has not
objected to such proposed findings of fact. The FEC contends in
those other cases that its factual assertions are correct and
that the underlying source materials are competent evidence.
Furthermore, it is clear that FEC statements made in other
litigations constitute "admissions of a party opponent" under FRE
801(d)(2). While the United States itself may not be "bound" by
FEC's admissions, they are nonetheless admissible in this case.
The United States was, of course, free to offer countervailing
evidence, but it cannot compel exclusion of FEC's admissions.
Likewise, the United States' objections to statements made by
FEC witnesses in other cases are generally meritless. As pointed
out by Mariani, the declarations from which these statements were
taken are among the documents to which the parties jointly
stipulated, reserving the right to object only to relevance and
materiality. As further pointed out by Mariani, these
declarations were submitted by the FEC in other cases and were
relied upon by the FEC in those cases in submitting "Statements
of Material Fact Not in Genuine Dispute."*fn7 Under these
circumstances, it is appropriate for Mariani to present these
declarations as evidentiary support for proposed findings of
C. The Competence of Various Witnesses
Objections interposed only on behalf of the United States to
various proposed findings of fact on the grounds that the witness
declarations underlying the factual assertions are not based upon
personal knowledge or reflect incompetent opinions are generally
without merit. Mariani has sufficiently demonstrated that
witnesses such as Leon Billings, formerly Executive Director of
the Democratic Senatorial Campaign Committee, Alan Hassenfeld,
Chairman of the Board of Hasbro, Inc. who has conveyed personal
and corporate monies to political party committees, and others
possess the requisite personal knowledge for the factual
assertions contained in their declarations.*fn8 Moreover,
Mariani has shown that the opinions of these and other witnesses
are both rationally based on their perceptions and helpful to a
clear understanding of their testimony or to the determination of
facts in issue so as to be admissible under FRE 701. The fact
that the FEC has not joined in the United States' challenge to
the adequacy of the foundation for the testimony provided by
these witnesses buttresses the conclusion
that their testimony is indeed competent.
D. Admissibility of List of Top Soft Money
The Government's objection to the admissibility of the Center
for Responsive Politics' ("CRP") "Top Fifty Soft Money
Contributors" list is also without merit*fn9 The Government
contends that the CRP figures should be excluded because they
purportedly aggregate permissible "hard money" and "soft money"
contributions. The declaration of the CRP Executive Director,
submitted as Joint Exhibit 6, however, points out that CRP
separated hard from soft money contributions in compiling its
list. The fact that the CRP grouped contributions from corporate
donors with contributions made by employees of those corporations
is supported by a rational inference that the intent of the
donations is to benefit the corporate entity itself. That it may
not be possible to divine the motivation of an individual
contributor who is affiliated with a large corporate donor may
serve to undermine the point sought to be made by the evidence,
but it does not compel its exclusion.
E. Admissibility of FEC Notice of Proposed Rulemaking
Another objection amenable to discussion in a generalized
manner is the Government's contention that the FEC Notice of
Proposed Rulemaking ("NOPR") cannot form the basis for factual
findings in this case.*fn10 The Government points out that the
NOPR "makes tentative conclusions and factual assumptions about
the corrosive effects of soft money on the federal campaign
finance system and the need for reform." (Joint Response to
Plaintiff's Proposed Findings of Fact, Dkt. Entry 69, at 16;
emphasis added.) That the statements in the NOPR are "tentative,"
however, does not detract from the fact that they nonetheless
constitute admissions of a party opponent under FRE 801(d)(2).
While the Government is entitled to present evidence that may
persuade a factfinder that the "tentative" conclusions and
assumptions are erroneous, it cannot avoid the admissibility of
the NOPR in the first instance.
F. Admissibility of the Thompson Committee
The final objection worthy of general discussion concerns the
proposed findings that rely upon the Thompson Committee Minority
Report. This objection, interposed on behalf of the United States
only, pertains to Mariani's Proposed Findings 10, 11, 12-14,
34-36, 46, 94, 104, 106, 121, 126, 143, 172-181, 183-188, 191-99,
360, 361, 364, 438, 466, 467, 476-78, 521, 542, 581, and 583-85.
Mariani contends that this court should admit parts of the
Thompson Committee Minority Report under the exception to the
hearsay rule applicable to public records and reports set forth
in Federal Rule of Evidence 803(8)(C). One scholar has noted
that "[t]he Rule 803(8)(C) hearsay exception goes far beyond the
common law exception for public records, is controversial and
complex, [and] raises numerous difficult evidentiary
issues. . . ."*fn11 The rule, in pertinent part, states:
The following are not excluded by the hearsay rule,
even though the declarant is available as a witness:
Mariani claims that the Thompson Committee Minority Report
falls squarely within this hearsay exception, while the United
States claims that the report is inadmissible because the
"Minority Report's findings and conclusions were not adopted by
the majority." (Dkt. Entry 70 at 7.) The United States ties this
argument to the fact that the "report's findings must be
`authorized by law.'" Id. The United States argues in the
alternative that if the court admits the evidence, the court
should give that evidence little weight. Id. (citing cases of
statutory construction in which courts paid little heed to the
Mariani responds to these arguments on various levels. First he
notes that many of the findings of the Minority and Majority
Reports "overlap." (Reply Br. in Supp. of Pl.'s Proposed Findings
of Fact and Proposed Certified Questions, Dkt. Entry 93 at 24.)
Next, he notes that the FEC, an intervenor-defendant in this
case, itself offered portions of the Minority Report in an
ongoing case, Federal Election Comm'n. v. Colorado Republican
Fed. Campaign Comm., Civil Action No. 89-N-1159 (D.Colo.). Id.
Third, Mariani cites a long line of decisions purporting to
support the admissibility of congressional reports. Finally,
Mariani argues that he offers the evidence, not for its truth,
but to show the "appearance of corruption." (Dkt. Entry 93 at
The seminal Supreme Court case of Beech Aircraft v. Rainey,
488 U.S. 153, 109 S.Ct. 439, 102 L.Ed.2d 445 (1988), helped clarity
the law relating to Rule 803(8)(C). The Court unanimously held
that the rule has a broad application that includes both the
"factual findings" and the "opinions" that accompany such
findings. And it went on to emphasize the mechanisms trial courts
possess to protect the integrity of evidence. The Court, in an
extensive analysis of the ramifications of a liberal policy of
admission under Rule 803(8)(C), discussed the Advisory
Committee's comments on the rule.
Nowhere in its comments is there the slightest
indication that it even considered the solution
of admitting only "factual" statements from such
reports. Rather, the Committee referred throughout
to "reports" without any such differentiation
regarding the statements they contained. . . . Its
solution as to their admissibility is clearly stated
in the final paragraph of its report on this Rule.
That solution consists of two principles: First,
"the rule . . . assumes admissibility in the first
instance. . . ." Second, it provides "ample provision
for escape if sufficient negative factors are
While the Beech decision is not precisely on point in this case
because the report at issue was not congressional, its holding is
central to resolving the government's objections. The Beech
decision validates liberal admissibility and then recognizes the
built-in protections against extraneous evidence. Much of the
decision focuses on the trial court's superior vantage point and
ability to regulate the evidence through its discretion. Id. at
162, 109 S.Ct. 439.
Lower courts have explicitly addressed the admission of
congressional reports. In Hobson v. Wilson, 556 F. Supp. 1157
(D.D.C. 1982), aff'd in part, rev'd in part, 737 F.2d 1 (D.C.Cir.
1984), cert. denied, 470 U.S. 1084, 105 S.Ct. 1843, 85 L.Ed.2d
142 (1985), the court admitted into evidence portions of the
Staff Report of Select Committee to Study Governmental Operations
with respect to Intelligence Activities ("Church Report"), S.Rep.
No. 94-755, Supp. Vol. 3. Hobson focused on the fact that "[t]he
segments of the Church Committee Report submitted to the jury
reflected adherence to appropriate standards of scholarly
responsibility, investigative integrity, and trustworthiness."
Id. at 1181.
Other courts have excluded congressional reports. In Anderson
v. City of New York, 657 F. Supp. 1571 (S.D.N.Y. 1987), the
district judge found a congressional subcommittee report
inadmissible because it lacked the "ordinary [indicia] of
reliability." Id. at 1579. That court's decision, although a
pre-Beech ruling, relied on the four main criteria the Advisory
Committee laid out in the notes to the rule — the same
trustworthiness criteria on which Beech placed so much emphasis.
Anderson, 657 F. Supp. at 1578-9.
Professor Schwartz notes that "because it is assumed that
public officials perform their duties properly, investigatory
reports encompassed within Rule 803(8)(C) are presumed to be
trustworthy. The burden is thus placed upon the party opposing
the admissibility of the report to demonstrate its lack of
reliability," (citing Miller v. Field, 35 F.3d 1088, 1090 (6th
Cir. 1994); Montiel v. City of Los Angeles, 2 F.3d 335 (9th Cir.
1993).*fn13 This meshes well with the Beech Court's holding that
the rule "presumes admissibility." Beech, 488 U.S. at 167, 109
In the matter sub judice, the United States hints at the
report's untrustworthiness, but does not directly address it.
Instead, it suggests that the report be excluded because,
according to the United States, the Minority Report is not
"authorized by law as required by Rule 803(8)(C)." (Dkt. Entry
70 at 7.) In making this argument, the United States does not
assert that the Thompson Committee Report itself was not
authorized by law. Moreover, the United States offers no concrete
support that a minority report is not authorized by law. Instead,
the United States cites many courts that have ignored minority
views in statutory construction. (Dkt. Entry 70 at 7-8.) These
cases are inapposite; Mariani does not offer the Minority Report
for statutory construction, but rather to address the subject of
the investigation, i.e., campaign finance.
Rule 803(8)(C) requires that the "factual findings" must
result from "an investigation made pursuant to authority granted
by law." The Rule does not, however, require that the "factual
findings" represent a majority view.
If at the time of approval of a measure or matter
by any committee (except for the Committee on
Appropriations), any member of the committee gives
notice of intention to file supplemental, minority,
or additional views, that member shall be entitled
to not less than three calendar days in which to
file such views, in writing, with the clerk of the
committee. All such views so filed by one or more
members of the committee shall be included within,
and shall be a part of, the report filed by the
committee with respect to that measure or matter.
Senate Rules, XXVI; Committee Procedures, 10(c), 105th Cong.,
Congressional Information Service, Inc. 1998 (emphasis added).
Clearly, the Minority Report meets the threshold requirement of
being authorized by law.
The "rule of completeness" embodied in FEE 106 buttresses the
conclusion that the Minority Report is to be regarded as
"authorized by law." FRE 106 requires that a court allow the
parties to demonstrate the overall tenor of a document. "When a
writing or recorded statement or part thereof is introduced by a
party, an adverse party may require the introduction at that time
of any other part or any other writing or recorded statement
which ought in fairness to be considered contemporaneously with
Acceptance of only the Majority Report would be directly
contrary to the concerns that Rule 106 addresses.*fn14 In the
context of congressional reports, one must expect at least some
polarity between the majority and minority. Allowing in one side
without the other might do violence to the completeness doctrine
that Rule 106 supports.
The Joint Stipulation of Facts notes that the committee "held
32 days of hearings . . . took 200 depositions . . . [and]
received more than 1,500,000 pages of documents." Id. at ¶
105. The investigation was timely, comprehensive, conducted by
those with special skill and experience, and employed procedural
safeguards. An extensive record exists. Thus, circumstantial
guarantees of trustworthiness and reliability abound.
Accordingly, the Minority Report will be admitted and its
contents considered to the extent they are probative of any fact
material to the issues presented by Mariani.
The remaining objections do not require extensive discussion.
As to Mariani's objections to the Government's proposed findings
of fact, I have sustained the objection to proposed finding 7 for
lack of evidentiary support. I have also declined to adopt those
proposed Government Findings of Fact that simply recite excerpts
of testimony from former Senator Alan K. Simpson (Government
Findings of Fact 27, 31-36.) I have also carefully considered
objections to proposed Government findings that pertained to
phraseology (e.g., Government Proposed Findings 21, 22 and 23)
and have modified those proposed findings so they are consistent
with the evidence and the law.
As to the remaining objections interposed by the FEC and/or the
United States, I have carefully considered contentions that
certain factual assertions were actually legal conclusions. I
have also carefully considered how certain findings proposed by
Mariani have been phrased. As noted above, I have generally not
accepted proposed findings of fact that merely quote testimony or
statements. I have also not accepted proposed findings that
are vague or are otherwise inappropriate for a factual finding.
(E.g., Mariani's Proposed Findings 97, 214, 222, 257, 315, 324,
343, 471, 472, 541, 545 and 546.) As noted above, I have also
eliminated a number of proposed findings of fact that, although
not necessarily disputed by FEC and/or the United States, are
cumulative and redundant. Objections to findings of fact that
cite newspaper and magazine articles (Mariani's proposed findings
518-24, 534-535, 541, 560 and 561), interposed only on behalf of
the United States, have been overruled to the extent that the
articles have not been offered for the truth of the matter
asserted, but instead to demonstrate the appearance of corruption
created by soft money contributions. As explained in Democratic
Party v. National Conservative Political Action Committee,
578 F. Supp. 797, 829 (E.D.Pa. 1983), aff'd in part, rev'd in part,
470 U.S. 480, 105 S.Ct. 1459, 84 L.Ed.2d 455 (1985), "[t]he hearsay
evidence rule does not bar . . . the admissibility of . . .
authenticated news reports when used to show public perceptions
of corruption, rather than corruption in fact." Objections that
proposed findings mischaracterize evidence or are vaguely stated
have also been taken into account in determining the facts to be
found in this case.
In summary, I have carefully parsed the parties' submissions
and have rejected proposed findings to which meritorious
objections pertain. Having eliminated the objectionable proposed
findings, there remain more than 400 of the 600 findings
proffered by the parties. As noted above, the parties have
stipulated to 117 facts, and the parties are in remarkable
agreement as to the accuracy of an overwhelming majority of the
additional statements of fact each side has proffered. Where
there is no serious dispute as to the accuracy of a parties'
proposed finding, I have relied upon the absence of dispute in
making a particular finding. Where, however, there is a dispute,
I have examined the underlying documents cited by the parties and
have either adopted a proposed finding verbatim or modified it to
reflect the contents of the underlying evidentiary submission.
After much deliberation as to the appropriate approach to be
taken in this unusual posture of deciding only the facts, not the
issues of law presented by the parties, I have opted to make
detailed findings as opposed to conclusory, ultimate findings.
While ultimate factual findings could be made (and are indeed set
forth in the Conclusion section to this opinion), I determined
that it was appropriate to defer to the approach advanced by the
party challenging the validity of the corporate and conduit
contributions bans, with the district judge's role being to
resolve evidentiary objections and decide contested facts. The
court of appeals will thus be presented with extensive findings
that comprehensively describe the soft money system, setting
forth in sometimes excruciating detail how corporations can give
unlimited amounts of money that influence elections and grant the
donors access to elected officials and those running for office.
Consistent with the foregoing, I now set forth as findings of
fact the following:
1. In October 1997, defendant UNITED STATES OF AMERICA filed an
indictment in this Court charging plaintiff, RENATO P. MARIANI, a
citizen and resident of the State of Pennsylvania who is eligible
to vote for the office of President of the United States, and
other individuals with, inter alia, violations of the Federal
Election Campaign Act, as amended ("FECA"). That action, United
States v. Mariani, No. 3:CR-97-225, is presently pending before
this Court. Joint Stipulation of Facts ("Joint Stip.") ¶ 1. A
the Indictment is Joint Exhibit ("JEx.") 264.*fn15
2. According to the Indictment, Mr. Mariani was the president,
treasurer and 25% shareholder of Empire Sanitary Landfill, Inc.
("Empire") and Danella Environmental Technologies, Inc.
("Danella"). The Indictment charges that between August 1994 and
December of 1996, Mr. Mariani and other officers and employees of
Empire and Danella sought to make campaign contributions to a
number of candidates for federal election. The campaigns to which
they allegedly contributed were those of Presidential hopefuls
Bob Dole, Bill Clinton and Arlen Specter, Senatorial candidates
Rick Santorum, Chuck Haytalan, Richard Duhaime and Max Baucus,
and candidates for the House of Representatives Frank Pallone,
Jr., Jon Fox and Bill Paxon. Indictment at ¶ 23; Joint Stip.
3. The Indictment alleges that Mr. Mariani and the other
Empire/Danella officers and employees solicited numerous Empire
and Danella employees, business associates, friends and family
members to make contributions of $1,000 per person (or in one
case $5,000 in the name of a political action committee) to the
campaigns of the chosen candidates. Indictment at ¶ 21 and
Counts 14-134 (listing individual contributions). According to
the Indictment, these contributions were reimbursed either
directly or indirectly by Empire. Indictment at ¶ 21. It is
also alleged that Mr. Mariani and other officers and employees at
Empire and Danella made individual contributions to these federal
candidates which were also reimbursed by Empire. Id.; Joint Stip.
4. Paragraph 10 of the indictment in United States v. Mariani,
3:CR-97-225 (M.D.Pa.), alleges that in 1995, Empire retained a
D.C. lobbying firm "to have an impact on legislation and policies
which could affect the flow of interstate waste to the landfill.
Specifically, Empire desired to have an impact on the
reconfiguration of the Interstate Transportation of Municipal
Waste bill which was pending in the 104th Congress." The
Indictment alleges that in April 1995, Mr. Mariani and other
officers and employees of Empire and Danella contacted employees,
associates, friends and family members in an effort to raise
funds for the New Jersey Steering Committee, a state fundraising
arm of the Dole campaign. Indictment at ¶¶ 25-26. Contributors
allegedly were asked to write personal checks in amounts of
$1,000 (or, in the case of couples, $2,000) and were reimbursed
with Empire corporate funds. Id. at ¶¶ 26, 28-31. It is also
alleged that on April 29, 1995, Mr. Mariani and another defendant
in the criminal case, Michael Serafini, attended a Steering
Committee luncheon at which they handed over an envelope
containing the contributions to Dole campaign officials. Id. at
¶ 27. When the Dole campaign reported the contributions to
the Federal Election Commission ("FEC"), its filing allegedly
attributed these $80,000 worth of contributions to the individual
contributors, rather than Empire. Id. at ¶ 32; Joint Stip.
¶ 4. The Dole contributions came approximately 10 days prior
to a crucial vote in the Senate on the Interstate Transportation
of Municipal Waste bill. Dole was the Senate majority leader at
5. As a result of this alleged conduct, the Indictment charges
Mr. Mariani (and others) with criminal violations of FECA.
Specifically, Mr. Mariani is charged with violations of 2 U.S.C. § 441b
and 441f. Id.; Joint Stip. ¶ 5.
7. Section 441b of FECA prohibits any corporation from making
any contribution in connection with any campaign for federal
office and provides that it is unlawful for any officer of a
corporation to consent to any prohibited corporate contribution.
Section 441f of FECA, the conduit contribution ban or
"anti-conduit" provision, prohibits one from making a contribution "in
the name of another person" or "knowingly permit[ting] his name
to be used to effect such a contribution." 2 U.S.C. § 441b
8. The purpose of the corporate contribution and conduit
contribution bans is to avoid corruption and the appearance of
corruption. Simpson Dep. at 66, [J.Ex. 38].
9. Mr. Mariani moved to dismiss all of the FECA charges in the
Indictment, and simultaneously instituted this action against the
United States seeking declaratory relief pursuant to 2 U.S.C. § 437h.
The FEC was thereafter granted leave to intervene in
this action as a defendant. Joint Stip. ¶ 6.
B. The Witnesses in this Case
10. The parties have stipulated that the testimony of the
following listed witnesses should be included in the evidentiary
record in this action.*fn16
(a) Professor Paul S. Herrnson. Professor Herrnson is a
Professor of Government and Politics at the University of
Maryland and a nationally recognized expert on campaign finance
legislation. Professor Herrnson was retained by the FEC as an
expert witness in this action and in Republican National
Committee v. Federal Election Commission (No. 98-CV-1207 (WBB))
(D.D.C.) (hereinafter "RNC v. FEC"), an action presently pending
before the federal district court in the District of Columbia.
Professor Herrnson's Professional Statement in RNC v. FEC, which
was incorporated in his report in this action, is JEx. 17; his
supplemental report in this action is JEx. 18. Drafts of both
reports were submitted to FEC counsel for their review and
comments before they were finalized. Deposition of Paul S.
Herrnson, Mariani v. United States ("Herrnson Dep.") at 28,
32-33. Professor Herrnson's curriculum vitae is annexed to JEx. 17.
(b) Alan K. Simpson. Mr. Simpson, who served as a United States
Senator from Wyoming from 1978-1996, was retained by plaintiff as
an expert witness in this action. His affidavit is JEx. 1; his
deposition transcript (with exhibits) is JEx. 38.
(c) Daniel H. Murray. Mr. Murray is a government relations
specialist who has engaged in lobbying activities for corporate
clients for more than 16 years. His affidavit, which was prepared
at the request of plaintiffs counsel in this action, and which
was also proffered by the FEC to the district court in support of
its summary judgment motion in RNC v. FEC, is JEx. 2; his
deposition transcript (with exhibits) is JEx. 37.
(d) Dale Bumpers. Dale Bumpers served as a United States
Senator from the State of Arkansas from 1975 through 1998. Before
being elected to the Senate, Mr. Bumpers also served as the
Governor of Arkansas from 1971-1975. At the request of the FEC,
Mr. Bumpers prepared a declaration, dated December 22, 1998, that
was proffered by the FEC in support of its motion for summary
judgment in RNC v. FEC. That declaration is JEx. 3.
(e) Paul Simon. Mr. Simon served in Congress for approximately
22 years, first as a Representative and then later as a Senator
from Illinois. At the request of the FEC, Mr. Simon prepared a
declaration, dated May 3, 1997, that was proffered by the FEC in
support of its motions for summary judgment in both FEC v.
Colorado Republican Federal Campaign Committee (Civil Action No.
89-N-1159) (D.Colo.) (hereinafter "FEC v. CRFCC") and RNC v. FEC.
That declaration is JEx 9.
(f) Timothy E. Wirth. Mr. Wirth served in Congress for
approximately 18 years, first as a Representative and then later
as a Senator from Colorado. At the request of the FEC, Mr. Wirth
prepared a declaration, dated May 5, 1997, that was proffered by
the FEC in support of its motions for summary judgment in both
FEC v. CRFCC and RNC v. FEC. That declaration is JEx 10.
(g) Christopher Shays. Since August of 1987, Congressman Shays
has served as a Member of the United States House of
Representative, representing the Fourth District of the State of
Connecticut. At the request of the FEC, Congressman Shays
prepared a declaration, dated December 7, 1998, that was
proffered by the FEC in support of its motion for summary
judgment in RNC v. FEC. That declaration is JEx. 5.
(h) Martin Meehan. Congressman Meehan has served as a Member of
the United States House of Representatives, representing the
Fifth District of the State of Massachusetts, since January 1993.
At the request of the FEC, Congressman Meehan prepared a
declaration, dated November 6, 1998, that was proffered by the
FEC in support of it, s motions for summary judgment in both FEC
v. CRFCC and RNC v. FEC. That declaration is JEx. 4.
(i) R. William Johnstone. Mr. Johnstone served as Legislative
Assistant and then Administrative Assistant to Congressman, and
then Senator, Wyche Fowler from 1977 through January 1993. Mr.
Johnstone also served as campaign manager for Mr. Fowler during
his 1986 and 1992 Senate campaigns. At the request of the FEC,
Mr. Johnstone prepared a declaration, dated April 7, 1997, that
was proffered by the FEC in support of its motions for summary
judgment in both FEC v. CRFCC and RNC v. FEC. His declaration is
(j) Leon G. Billings. Mr. Billings was the Executive Director
of the Democratic Senatorial Campaign Committee ("DSCC") from
1982-1983. At the request of the FEC, Mr. Billings prepared a
declaration, dated April 15, 1997, that was proffered by the FEC
in support of its motions for summary judgment in both FEC v.
CRFCC and RNC v. FEC. That declaration is JEx 11.
(k) Robert Hickmott. Mr. Hickmott has served as an Associate
Finance Director of the Democratic National Committee (1980), the
Executive Director of the Democratic Business Council (1981), the
National Finance Director for Timothy Wirth's Senatorial campaign
(1985-1986) and the Deputy Executive Director of the Democratic
Senatorial Campaign Committee ("DSCC") (1991-1992). At the
request of the FEC, Mr. Hickmott prepared a declaration, dated
April 8, 1997, that was proffered by the FEC in support of its
motions for summary judgment in both FEC v. CRFCC and RNC v. FEC.
That declaration is JEx 12.
(l) Robert Rozen. Mr. Rozen worked for Senator Wendell Ford
(1980-1985) and Senator George Mitchell (1985-1995), handling a
variety of financial legislative issues for both. Both Senator
Ford and Senator Mitchell chaired the Democratic Senatorial
Campaign Committee ("DSCC") while Mr. Rozen worked for them. At
the request of the FEC, Mr. Rozen prepared a declaration, dated
April 17, 1997, that was proffered by the FEC in support of its
motions for summary judgment in both
FEC v. CRFCC and RNC v. FEC. That declaration is JEx 13.
(m) Professor Clyde Wilcox. Mr. Wilcox is a Professor of
Government at Georgetown University specializing in public
opinion research. At the request of the FEC, Mr. Wilcox prepared
a statement offering his expert views about public perceptions
concerning the campaign finance system that was proffered by the
FEC in support of its motions for summary judgment in both FEC v.
CRFCC and RNC v. FEC. His statement is JEx. 20.
(n) Frank J. Sorauf and Jonathan S. Krasno. Mr. Sorauf and Mr.
Krasno are political science professors at the University of
Minnesota and Princeton University, respectively. At the request
of the FEC, they prepared a report entitled "Political Party
Committees and Coordinated Spending", that was proffered by the
FEC in support of its motions for summary judgment in both FEC v.
CRFCC and RNC v. FEC. That report is JEx 19.
(o) Charles E.M. Kolb. Since September of 1997, Mr. Kolb has
served as the President of the Committee for Economic Development
("CED"), an independent, nonpartisan research and policy
organization comprised of more than 250 prominent business
leaders and educators. Between November 1997 and early 1999, the
CED conducted a comprehensive study of the 1996 election
specifically focusing on the campaign finance system. At the
request of the FEC, Mr. Kolb prepared a declaration (attaching
the CED's final report and policy statement), dated April 29,
1999, that was proffered by the FEC in support of its motion for
summary judgment in RNC v. FEC. That declaration is JEx. 16.
(p) Alan H. Hassenfeld. Since 1989, Mr. Hassenfeld has served
as Chairman of the Board and Chief Executive Officer of Hasbro,
Inc., a global manufacturing company based in Rhode Island with
annual revenues in excess of $3 billion. At the request of the
FEC, Mr. Hassenfeld prepared a declaration, dated April 19, 1999,
that was proffered by the FEC in support of its motion for
summary judgment in RNC v. FEC. That declaration is JEx. 14.
(q) Larry Makinson. Mr. Makinson has been a staff member since
1988 of the Center for Responsive Politics, a non-partisan
non-profit research organization that monitors and analyzes campaign
contributions in federal elections. He currently serves as its
executive director. Mr. Makinson submitted a declaration in this
action in response to a subpoena issued by plaintiffs counsel.
That declaration is JEx. 6.
(r) Pat Huyck. Mr. Huyck has been an employee of the Republican
National Committee for 16 years and currently serves as its
Director of Accounting. Mr. Huyck submitted a declaration in this
action in response to a subpoena issued by plaintiffs counsel.
That declaration is JEx. 7.
(s) Joseph E. Sandler. Mr. Sandler was the General Counsel of
the Democratic National Committee from 1995-1996. Mr. Sandler
submitted a declaration in this action in response to a subpoena
issued by plaintiffs counsel. That declaration is JEx. 8.
C. The Documentary Evidence in this Case
11. On March 11, 1997, the United States Senate voted
unanimously to authorize the Governmental Affairs Committee to
conduct an investigation of alleged illegal or improper
activities in connection with 1996 federal election campaigns.
Joint Stip. ¶ 104.
12. Over the course of nine and a half months, the Committee
issued 427 subpoenas and held 32 days of hearings at which some
70 witnesses testified. Committee staff took 200 depositions,
conducted more than 200 witness interviews, and received more
than 1,500,000 pages of documents in response to the Committee's
subpoenas. Finally, the Committee memorialized its findings in a
report, including both Majority and Minority views. See
Investigation of Illegal or Improper Activities in Connection
with 1996 Federal Election Campaigns,
S.Rep. No. 105-167 (1998) (hereinafter "Report"). Joint Stip.
13. Currently, the Federal Election Commission is in the midst
of a rulemaking proceeding concerning the use of soft money by
political parties. Notice of Proposed Rulemaking, 63 Fed.Reg.
37721, 37722 (1998).
14. On July 13, 1998, the FEC issued its Notice of Proposed
Rulemaking: "Prohibited and Excessive Contributions; Soft Money;
Proposed Rule," 63 Fed.Reg. 37721 (1998) (to be codified at 11
C.F.R. Pts. 102, 103 & 106) ("FEC Notice of Proposed
15. In support of its motion for summary judgment in FEC v.
CRFCC, the FEC submitted "Federal Election Commission" s
Statement of Material Facts Not in Genuine Dispute" to the
district court ("FEC Statement of Facts I"). Joint Stip. ¶
114. It is PSEx. 1.*fn19
16. In support of its motion for summary judgment in RNC v.
FEC, the FEC submitted "Defendant Federal Election Commission's
Statement of Material Facts" to the district court ("FEC
Statement of Facts II"). Joint Stip. ¶ 116. It is PSEx. 2.
17. In support of its motion for summary judgment in RNC v.
FEC, the FEC submitted "Federal Election Commission's Memorandum
In Support of its Motion for Summary Judgment" to the district
court ("FEC RNC Mem."). Joint Stip ¶ 117. It is PSEx. 3.
II. THE FEDERAL ELECTION CAMPAIGN
18. FECA, enacted by Congress in 1971, was a comprehensive
attempt to regulate the financial aspects of federal political
campaigns. See Federal Election Campaign Act of 1971, Pub.L. No.
92-225, 86 Stat. 3. FECA has since been amended a number of
19. In response to perceived abuses in the 1972 presidential
election, in 1974 Congress enacted the Federal Election Campaign
Act Amendments of 1974, Pub.L. No. 93-443, 88 Stat. 1263. The
Amendments placed further restrictions on campaign contributions
and expenditures and, among other things, adopted a system for
public financing of presidential election campaigns.
20. Under FECA, it is illegal for individuals to make
contributions of more than $1,000 to a candidate for federal
office per election, $20,000 per year to a national party's
political committees, $5,000 per year to any other political
committee, and $25,000 per year in total contributions to all
federal candidates, party committees, or political committees.
2 U.S.C. § 441a(1), (3).
21. Under FECA, it is illegal for political action committees
("PACs") to make contributions of more than $5,000 to a federal
candidate per election, $15,000 per year to a national party's
political committees and $5,000 per year to any other political
committee. 2 U.S.C. § 441a(2).
22. Under FECA, it is illegal for corporations and labor unions
to make any contributions in connection with a candidate's
election for federal office from their own treasury funds.
2 U.S.C. § 441b(a).
24. The prohibitions in section 441b apply equally to both
corporations and labor organizations, although its coverage of
unions was added long after the original 1907 statute, which
applied only to corporations.
25. 2 U.S.C. § 441b has always been applied only to federal
26. The anti-conduit provision in 2 U.S.C. § 441f applies
to all contributions, not just those from corporations.
27. One purpose of 2 U.S.C. § 441f is to prevent the
circumvention of the ban on corporate and union contributions.
Section 441f similarly helps to prevent circumvention of the
limits on contributions by individuals and groups in 2 U.S.C. § 441a
and the prohibition on contributions by foreign
nationals in 2 U.S.C. § 441e. Section 441f also ensures that
proper disclosure of the actual sources of campaign contributions
occurs in federal elections. These provisions of the law, as well
as section 441b, are intended to promote a fair, open, and
legitimate campaign finance system and to prevent corruption or
the appearance of corruption in federal elections. Herrnson
Report at 3 [JEx. 18].
28. FECA also contains extensive disclosure and reporting
requirements for candidates and political committees, as well as
for other entities that make independent expenditures.
29. In 1976, the United States Supreme Court issued its
decision in Buckley v. Valeo, 424 U.S. 1, 96 S.Ct. 612, 46
L.Ed.2d 659 (1976). In upholding FECA's individual contribution
limits while striking down the statute's corresponding
expenditure limits, the Court drew a distinction between
contributions to candidates and independent political spending.
30. As a result of numerous judicial decisions and FEC advisory
opinions following the Supreme Court's decision in Buckley, by
1980 a distinction had developed between what is often referred
to as "hard" and "soft" money in the campaign finance context.
B. The Distinction Between "Hard" and "Soft" Money
31. Entities that are prohibited from making contributions to a
federal (i.e., "hard money") account and individuals wishing to
make donations in excess of the contribution limits set forth in
FECA have generally been permitted to direct those donations to a
nonfederal (i.e., "soft money") account, even though donations to
nonfederal accounts are often used for activities that have an
impact on federal elections. FEC Notice of Proposed Rulemaking at
37727 [JEx. 39].
32. Many political party committees (such as the Republican or
Democratic National Committees) solicit two kinds of
contributions: those that can permissibly be used under the
Federal Election Campaign Act "for the purpose of influencing"
federal elections, 2 U.S.C. § 431 (8)(A)(i), and those that
may not be used for that purpose. Contributions that are
permissible under the Act are, often referred to as "hard money"
contributions. Contributions that are not permissible —
e.g., contributions in excess of the section 441a dollar limits,
all contributions from corporate and labor organization general
treasuries, and contributions from federal contractors —
are commonly known as "soft money." Although this soft money
cannot be contributed to federal candidates or otherwise used to
influence federal elections, political party committees may
deposit such funds in a separate account to be used for state and
local campaign activity to the extent allowed by state law, and
for limited, party-building activities specifically designated in
the statute. See Colorado Republican, 518 U.S. at 616, 116 S.Ct.
2309; 2 U.S.C. § 431 (8)(B); 11 C.F.R. § 102.5.
34. Corporations cannot give money to federal candidates.
35. Corporate donations to political party committees have
never been prohibited by FECA.
36. There are important legal distinctions among 1)
expenditures made from the treasuries of corporations, labor
unions, or other groups that are intended to influence the
outcome of a federal election without expressly advocating a
federal candidate's election or defeat, 2) corporation and union
treasury funds that are contributed to political parties that
later use these monies to influence the outcome of a federal
election without expressly advocating a federal candidate's
election or defeat, 3) hard money contributions from individuals,
political parties, or PACs to federal candidates, 4) monies from
the treasuries of corporations, labor unions, or other groups if
contributed directly to a federal candidate, and 5) monies from
the treasuries of corporations, labor unions, or other groups
that are given to an individual who serves as a conduit for
contributing the money to a federal candidate. Herrnson Report at
3-4 [Jex 18].
37. An important legal distinction among the preceding
activities is based on the amount of control that the candidate
has over them. Party funds that originate as contributions from
corporation or union treasuries are at no time directly under the
candidate's control. Nonetheless, candidates often are involved
in the collection of party soft money, and many candidates expect
that some of the party monies they help collect will be used to
help their election efforts. Id. at 4.
38. Money that a federal candidate has complete control over,
including hard money raised from individuals, parties, PACs, or
the candidate himself or herself, is money that a candidate can
spend any way that he or she wishes (within the confines of the
law). Money that both a candidate and a party have some control
over, such as coordinated expenditures (referenced as §
441a(d) under FECA), is often subject to some negotiation. The
fact that party committees usually influence how these funds are
spent occasionally leads to friction between a candidate's
campaign and the party organization making the expenditure. Id.
39. Candidates have less control over party soft money
expenditures than funds contributed to them directly. Party soft
money that is raised with the assistance of a federal candidate
may be spent, in conjunction with hard money, in accordance with
allocation formulas promulgated by the FEC, for party-building
activities, agenda-setting efforts, issue advocacy ads, voter
mobilization drives, and a variety of other activities designed
to help the election of candidates apart from the candidate who
helped raise the money. Moreover, some party agenda-setting
efforts, issue ads, and other activities may actually be contrary
to a candidate's wishes. For example, the issue ads that the
Democratic Senatorial Campaign Committee spent to help reelect
Wisconsin Democrat Russell Feingold to the Senate were made over
the candidate's objections. Feingold stated that outside spending
was against his principles. It also was not consistent with his
image and campaign message. Id. at 4-5; 11 C.F.R. Part 106.
40. Hard money can be spent to explicitly advocate the election
of a federal candidate; "expenditures," as defined in FECA, from
corporation or union treasuries cannot presently be used directly
for that purpose. Herrnson Report at 5 [JEx. 18].
42. Although there are important legal distinctions between
"hard" and "soft" money contributions, soft money plays an
important role in contested races for federal elective offices.
Soft money is, in essence, the "black market" economy of campaign
finance. Ceilings on individual contributions to federal
candidates and the party's federal campaign accounts have
encouraged wealthy individuals to look for alternative ways to
spend money in elections. Prohibitions against corporations,
trade associations and unions contributing or spending funds from
their treasuries have had similar effects. Dep. of Prof. Paul S.
Herrnson in Mariani v. United States ("Herrnson Dep.") at 51-52
[JEx. 36]. Soft money has proved to be the means by which wealthy
individuals and corporations evade FECA restrictions in order to
influence elections and secure access to elected officials and
candidates for federal elective office.
A. Soft Money Is Easier To Raise Than Hard Money
43. Soft money is much easier to raise than hard money because
it can be donated in large sums. Because parties can raise more
soft money, they spend more soft money. Herrnson Dep. at 81 [JEx.
44. One reason soft money is easier to raise is that entities
such as corporations, which are barred from contributing directly
to campaigns, are permitted to donate soft money. Id.
45. Although corporations are flatly barred from making any
contributions to campaigns in hard money, they may at the same
time make gifts in literally unlimited amounts to political
parties via soft money. Herrnson Dep. at 91-92 [JEx. 36].
46. Some soft money contributions are collected from
corporations, unions and wealthy individuals in excess of $1
million. Id. at 40.
47. Although FECA bans businesses and unions from making
contributions directly to candidates, and limits individuals to
contributions of $1,000 and PACs to contributions of $5,000 per
candidate during each phase of the election, the law has not
prevented wealthy individuals, corporations, and other collective
entities from playing important roles in campaign finance. Id. at
48. A 1992 DNC fundraising guide entitled "Democratic National
Committee DNC Victory Fund `92" stated as follows:
"HOW TO WRITE THE CHECK(S)
(A) Federal Contributions from individuals of up to
$20,000 should be made by personal check payable to:
DNC VICTORY `92/FEDERAL
(B) Non-Federal Contributions from individuals can
be made payable to:
DNC VICTORY `92/NON-FEDERAL
Democratic National Committee Fund-Raising Guide, 1992, Fig. 5.1
in Herbert E. Alexander & Anthony Corrado, Financing the 1992
Election 112 (1995); Joint Stip. ¶ 81.
49. The same document stated:
"HOW TO WRITE CORPORATE/UNION CHECK(S)
Checks from corporate treasury funds or labor
union treasury funds may be written in an
unlimited amount to:
DNC VICTORY `92/NON-FEDERAL
Id. at 113 (emphasis in original); Joint Stip. ¶ 82.
50. Soft money contributions have provided corporations, labor
unions, and wealthy individuals with a way around FECA's
restrictions on the amounts that may be contributed by
individuals and the ban on corporate contributions to candidates
for federal elective office. Minority Report at 7516 [JEx. 21].
B. The Growth of Soft Money
51. It is estimated that in the 1980 election cycle, the
national party committees raised and spent approximately $19
million in soft money funds. Anthony Corrado, Giving, Spending
and "Soft Money", 6 J.L. & Pol'y 45, 50-51 (1997) [JEx.
52. In the 1987-1988 election cycle, it is estimated that
approximately $45 million was raised and spent in soft money
funds. Id. at 51.
53. The RNC estimates that it raised and spent approximately
$22 million in nonfederal funds during the 1987-1988 election
cycle. Huyck Decl. at ¶ 7 [JEx. 7].
54. In the 1991-1992 election cycle, the total amount of soft
money raised by the national party committees, as set forth in
their reports to the FEC, was approximately $86 million ($49.8
million by the Republican national party committees and $36.3
million by the Democratic national party committees). Federal
Election Commission, National Party Nonfederal Activity (visited
April 13, 1999) <http://www.fec.gov/finance/soft-sum.htm> [JEx.
40]; Joint Stip. ¶ 9.
55. In the 1993-1994 election cycle, the total amount of soft
money raised by the national party committees, as set forth in
their reports to the FEC, was approximately $101.7 million ($52.5
million by the Republican national party committees and over
$49.1 million by the Democratic national party committees). Id.;
Joint Stip. ¶ 10.
56. During the 1995-1996 election cycle, the Republican
national party committees reported receipts of approximately
$138.2 million and expenditures of approximately $149.7 million
in soft money, increases of 178 percent and 224 percent
respectively, when compared to the similar period in 1991-1992.
Federal Election Commission, FEC Reports Major Increase in Party
Activity for 1995-96 (FEC press release), March 19, 1997, at 1
[JEx. 47]; Joint Stip. ¶ 11.
57. During the 1995-1996 election cycle, the Democratic
national party committees reported approximately $123.9 million
in receipts and approximately $121.8 million in expenditures of
soft money, increases of 242 percent and 271 percent
respectively, from the similar period in 1991-1992. Id.; Joint
Stip. ¶ 12. ¶
58. The growth in soft money since 1980 has been fueled by
the solicitation of large contributions of $100,000 or
more from corporations, as well as from wealthy individuals and
labor unions, and the corresponding ability of the party
committees to spend such funds. Herrnson Dep. at 94-95 [JEx. 36].
59. In addition to the increase in the total dollar amount of
soft money contributions over the last decade, there was also an
increase in the number of contributions made to the party
committees' nonfederal accounts that would have been prohibited
under FECA if they had been made to a
federal account. FEC Notice of Proposed Rulemaking at 37727 [JEx.
60. During the 1992 presidential election cycle, the national
party committees' nonfederal accounts received at least 381
individual contributions of more than $20,000. During the 1992
presidential election cycle, the national party committees'
nonfederal accounts received about 11,000 soft money
contributions from sources that are prohibited from making
contributions under federal law into federal accounts. Joint
Stip. ¶¶ 14-15.
61. In the 1995-1996 election cycle, the national party
committees' non-federal accounts received close to 1,000
individual contributions in excess of $20,000, and approximately
27,000 contributions from sources that are prohibited from
contributing to federal accounts. Joint Stip. ¶ 16.
62. According to reports filed with the FEC, during the 1994
and 1998 election cycles, corporations donated over 50% of all
itemized soft money contributions. Committee for Economic
Development, Investing in the People's Business: A Business
Proposal for Campaign Finance Reform at 26 (1999) ("[f]igures
based on unadjusted FEC data"). Declaration of Charles E.M. Kolb
in RNC v. FEC, Attachment at 26 [JEx. 16].
63. Corporate donations were especially important to the growth
of soft money in 1996. For example, a 1997 analysis conducted by
the Los Angeles Times of the political donations made by the 544
largest public and private companies revealed that soft money
donations by these corporations had more than tripled between
1992 and 1996, growing from $16 million to $51 million. Herrnson
Dep. at 98 [JEx. 36].
64. Common Cause compiled the following list of soft money
donors of $250,000 or more to Republican party committees from
January 1, 1995, through June 30, 1996, including how much they
contributed, and sent the list to various newspapers. (The dollar
figures encompass donations from subsidiaries and company
Philip Morris Co. Inc.-1,632,283
RJR Nabisco Inc.-970,450
Amer. Financial Group-794,000
Atlantic Richfield Co.-615,175
US Tobacco Co.-448,768
Joseph E. Seagram & Sons Inc.-435,000
Eli Lilly & Co. 425,000
AT & T-417,590
Brown & Williamson Tobacco Corp.-400,000
Burlington Northern Santa Fe Corp.-367,000
Bristol-Meyers Squibb Co.-355,000
Reliance Group Holdings Inc.-340,000
AG Spanos Construction-335,000
Archer Daniels Midland Co.-335,000
Forstman Little & Co.-309,000
PaineWebber Group Inc.-290,000
Time Warner Inc.-290,000
Anheuser-Busch Co. Inc.-281,250
WMX Technologies Inc.-278,600
MCI Telecommunications Corp.-270,000
Blue Cross & Blue Shield Assn.-255,078
Druckenmiller, Stanley F.-250,000
Kellet, Stiles A-250,000
Pilgrim's Pride Corp.-250,000
FEC Statement of Material Facts II at ¶ 217 [PSEx. 2]; Common
Cause List of Soft Money Donors [JEx. 26].
65. The Center for Responsive Politics compiled a list of the
"Top 50 Soft Money Contributors" in the 1995-1996 election cycle.
Declaration of Larry Makinson in Mariani v. United States
("Makinson Decl.") [JEx. 6] The list, which was recently updated
to include all amendments to FEC filings, and which aggregates
corporate contributions with contributions from individuals
associated with a particular corporation, is as follows:
Philip Morris $3,018,036
Joseph E. Seagram & Sons $2,035,583
RJR Nabisco $1,442,931
Walt Disney Co. $1,347,000
Atlantic Richfield $1,250,843
Communications Workers of America $1,150,300
American Redn of St/Cnty/Munic
AT & T $999,524
Federal Express Corp. $1,157,044
MCI Telecommunications $1,005,418
News Corp. $869,700
Assn. of Trial Lawyers of America $803,400
Lazard Freres & Co. $758,956
MacAndrews & Forbes $779,649
Eli Lilly & Co. $746,835
United Food & Commercial Workers
Time Warner $736,250
Chevron Corp $702,306
Archer-Daniels Midland Co. $700,000
Enron Corp. $686,900
UST Inc/US Tobacco $725,250
NYNEX Corp. $652,802
Textron Inc. $654,227
American Financial Group $645,000
Brown & Williamson Tobacco $642,500
Laborers Union $634,588
Loral Corp. $632,000
Integrated Health Services Inc. $609,000
American Defense Institute $600,000
Goldman, Sachs & Co. $600,230
Entergy Corp. $592,371
Northwest Airlines $609,445
Blue Cross/Blue Shield $577,688
WMX Technologies $576,500
Travelers Group $562,344
Bristol-Myers Squibb $552,400
BankAmerica Corp. $552,379
Tobacco Institute $537,357
DreamWorks SKG $702,400
Milberg, Weiss et al. $530,000
Coca-Cola Co. $519,640
Pfizer Inc. $514,971
Glaxo Wellcome Inc. $510,322
General Motors $504,150
Stride-Rite Foundation $500,000
Hayes, Mariam Cannon $500,000
Public Securities Asan. $507,313
Makinson Decl. at ¶ 13 & Attachment [JEx. 6].
E. Soft Money Donations: Industries with Pressing Legislative
66. As a general rule, in the 1995-1996 election cycle, the
largest soft money gifts came from corporations or interest
groups that faced pressing issues in Washington. Herrnson Dep at
98, J.Ex. 36. For example:
• Tobacco companies contributed huge
sums of soft money to both of the major
parties. Philip Morris and its executives
gave a total of more than $3 million
in soft money, including about $2.5 million
to the Republicans, and close to
$500,000 to the Democrats. RJR Nabisco
contributed over $1.4 million, including
almost $1.2 million to Republican
committees and $255,000 to the Democrats.
US Tobacco donated $675,000, of
which $556,000 went to the Republicans.
Brown and Williamson Tobacco gave
about $642,000, almost all of which,
$635,000, went to the Republicans. And
the Tobacco Institute gave $531,000,
with $425,000 going to the Republicans
and $106,000 to the Democrats.
• AT & T gave almost $1 million in
soft money, with $552,000 going to the
Republicans and $447,000 to the Democrats.
AT & T's ma] or competitor, MCI
Telecommunications, contributed $966,000,
$607,000 of which went to the Democrats.
NYNEX Corporation, a regional
telecommunications company, donated
$651,000, with $411,000 given to the Republicans
and $240,000 to the Democrats.
• The Association of Trial Lawyers of
America gave over $800,000, with
approximately $606,000 donated to the
Democrats and $197,000 to the Republicans.
• Blue Cross/Blue Shield donated almost
$578,000 in soft money, giving
$438,000 to the Republican Party and
about $140,000 to the Democratic Party.
Integrated Health Services, Inc., contributed
$609,000, $574,000 of which
went to the Democrats. Eli Lilly &
Co. donated $747,000, with $507,000 given
to the Republicans and $240,000 to
the Democrats. Another pharmaceutical
giant, Bristol-Myers-Squibb, gave
$552,000, with $438,000 going to the Republicans
and over $114,000 to the
Center for Responsive Politics, "Top 50 Soft Money Contributors,"
The Big Picture: Who Won the Last Election (visited October 8,
1998) <http://www.crp.org/pubs/ bigpicture/top/bp.top50soft.html>
(hereinafter "Top 50 Contributors List"); Herrnson Dep. Ex. 10
[JEx. 36]. See Herrnson Dep. at 98-101, 105-106 [JEx. 36].
67. National party committee reports filed with the FEC
indicate that during the 1995-1996 election cycle the total
amount of soft money donated by five tobacco companies (Brown &
Williamson, Lorillard Tobacco, Philip Morris, RJR Nabisco, and
U.S. Tobacco Co.) to the national party committees was
approximately $5,304,508. Joint Stip. ¶ 17.
68. National party committee reports filed with the FEC
indicate that during the 1995-1996 election cycle Philip Morris
gave a total of $3 million in soft money to the national party
committees, including $2.5 million to the Republican national
party committees, and one half million to the Democratic national
party committees. Top 50 Contributors List.
69. National party committee reports filed with the FEC
indicate that during the 1995-1996 election cycle RJR Nabisco
donated $1.4 million in soft money to the national party
committees, including $1.2 million to Republican national party
committees and $255,000 to Democratic national party committees.
70. National party committee reports filed with the FEC
indicate that during the 1995-1996 election cycle U.S. Tobacco
donated $675,000 in soft money to national party committees, of
which $556,000 went to the Republican national party committees.
71. National party committee reports filed with the FEC
indicate that during the 1995-1996 election cycle Brown &
Williamson Tobacco donated $643,000 in soft money to national
party committees, of which $635,000 went to Republican national
party committees. Id.
72. National party committee reports filed with the FEC
indicate that during the 1995-1996 election cycle the Tobacco
Institute, a trade organization of the tobacco industry, gave
$531,000 in soft money to the national party committees, with
$425,000 going to the Republican national party committees and
$106,000 to the Democratic national party committees. Id.
The Telecommunications Industry
73. National party committee reports filed with the FEC
indicate that during the 1996 election cycle AT & T donated
approximately $1 million in soft money to the national party
committees, with $552,000 going to Republican national party
committees and $447,000 to Democratic national party committees.
Top 50 Contributors List.
74. National party committee reports filed with the FEC
indicate that during the 1996 election cycle MCI
Telecommunications donated $966,000 in soft money to the national
party committees, $607,000 of which went to Democratic national
party committees. Id.
75. National party committee reports filed with the FEC
indicate that during the 1996 election cycle NYNEX Corporation, a
regional telecommunications company, donated $651,000 in soft
money to national party committees, with $411,000 going to
Republican national party committees and $240,000 to Democratic
national party committees. Id.
76. Telecommunications legislation governing the entry of the
seven local "Baby Bell" telephone companies into the long-distance
telephone service market was drafted and signed into law
during the 1996 election cycle. Common Cause, Local & Long
Distance Telephone Companies Give Record Soft Money During Final
Months of Telecommunications Overhaul (February 9, 1996)
<http://www.commoncause.org/publications/296com.htm> [JEx. 25].
77. Certain telephone companies donated large sums of soft
money during the drafting of the proposed telecommunications
legislation. On October 17, 1995, the week after House-Senate
telecommunications bill conferees were named and a week before
their negotiations began, MCI donated $100,000 in soft money to
the DNC. On December 20, 1995, the conferees' reached agreement
on the bill. On December 21, AT & T gave $190,000 to the DNC. The
same day, the agreement was put on hold because House Republican
conferees objected to certain provisions and to Clinton
Administration statements claiming victory. On December 28, AT &
T donated $200,000 to the RNC. On December 29, MCI gave $100,000
to the DNC and $20,000 to the NRCC. The final version of the bill
was subsequently passed by the House and Senate, and President
Clinton signed it into law on February 8, 1996. Id.
The Association of Trial Lawyers
78. National party committee reports filed with the FEC
indicate that during the 1996 election cycle the Association of
Trial Lawyers of America donated $803,000 in soft money to the
national party committees, with approximately $606,000 donated to
Democratic national party committees and $197,000 to Republican
national party committees. Top 50 Contributors List.
79. A series of legal reform initiatives, including tort reform
legislation, were introduced in Congress during the 1996 election
cycle. See Herrnson Dep. at 101 [JEx. 36].
80. National party committee reports filed with the FEC
indicate that during the 1996 election cycle Blue Cross/Blue
Shield donated almost $578,000 in soft money to the national
party committees, giving $438,000 to Republican national party
committees and about $140,000 to Democratic national party
committees. Top 50 Contributors List.
81. National party committee reports filed with the FEC
indicate that during the 1996 election cycle Integrated Health
Services, Inc. contributed $609,000 in soft money to the national
party committees, $574,000 of which went to Democratic national
party committees. Id.
82. National party committee reports filed with the FEC
indicate that during the 1996 election cycle Eli Lilly & Co.
donated $747,000 in soft money to the national party committees,
with $507,000 given to Republican national party committees and
$240,000 to Democratic national party committees. Id.
83. National party committee reports filed with the FEC
indicate that during the 1996 election cycle, Bristol-Myers-Squibb
gave approximately $552,000 in soft money to the national
party committees, with $438,000 going to Republican national
party committees and $115,000 to Democratic national party
84. Members of Congress proposed numerous health care reform
initiatives, including potential changes in Medicare and managed
care regulations, during the 1996 election cycle. See Herrnson
Dep. at 105-106 [JEx. 36].
F. Corporate Donors Give Soft Money to Both Democrats
86. Some donors give to whichever party is in power. FEC
Statement of Material Facts II at ¶ 340 [PSEx. 2]; Declaration of
Hon. Martin Meehan, RNC v. FEC ("Meehan Decl.") at ¶ 9 [JEx. 4].
87. Contributions by individuals, organizations and companies
to both Republican and Democratic political parties is pervasive
and gives the impression that the purpose of the contributors'
goal is "making political investments and protecting their
flanks." FEC Statement of Material Facts II at ¶ 343 [PSEx. 2]
(quoting Richmond Times Dispatch, Editorial, "Cash Cows," August
6, 1997 [JEx. 195]).
88. A study conducted by the Center for Responsive Politics
found that donors representing five traditionally Republican
industries shifted their patterns of soft money giving in the
period after the 1992 Democratic convention: three shifted from
an average of 3 to 1 or 4 to 1 in favor of the Republicans to an
advantage in favor of the Democrats, while in the cases of the
other two the gap between Republicans and Democrats narrowed
significantly. Herbert E. Alexander & Anthony Corrado, Financing
the 1992 Election 156 (1995); Joint Stip. ¶ 18.
89. Some corporations observing shifts in power have made
adjustments in their soft money giving. In the 1992 election, for
instance, the Democrats received sizable contributions from
individuals or corporations that had donated funds to the RNC
earlier in the election cycle. In most instances, these gifts
were offered late in the race, as the likelihood of a Democratic
victory increased. Herrnson Dep. at 107 [JEx. 36].
90. During December 1995, Eli Lilly contributed $20,000 to the
DCCC, $25,000 to the NRSC, $20,000 to the DSCC, and $20,000 to
the NRCC, because these congressional committees "represent the
major party Congressional campaign committees and will provide a
premier opportunity for us [Eli Lilly] to interact with senior
Congressional and Administration officials. These organizations
are important and our participation in them will have an
immediate value." FEC Statement of Material Facts II at ¶ 344
[PSEx. 2]; Eli Lilly Proposed Corporate Political Contributions,
November 15, 1995 [JEx. 155].
91. When the Republican Party took control of the U.S. House
and Senate in 1994, the tobacco industry dramatically increased
its soft money donations to the Republican Party, including the
Republican National Committee. The industry also gave to the
Democratic Party, but in significantly smaller amounts. This was
part of a tobacco industry strategy to avoid what it regarded as
undue regulation at a time when there was much discussion of such
regulation, in view of the settlements of pending tobacco-related
disputes then being negotiated with state attorneys general
around the country. FEC Statement of Material Facts II at ¶ 522
[PSEx. 2]; Meehan Decl at ¶ 11.
92. Although in the 1994 cycle MCI reportedly gave comparable
amounts of soft money to Republicans (over $168,000) and
Democrats (over $188,000), during the 1996 cycle the company's
giving did tilt heavily away from the Republicans (over $358,000)
and toward the Democrats (over $607,000). However, in the 1998
cycle, the company's soft money giving swung back again, with
over $719,000 reportedly going to Republicans and over $422,000
to Democrats. FEC Brief, RNC v. FEC, at 28 n.21 [PSEx. 3].
93. Microsoft Corporation, which played little role in
political giving for years-reportedly giving only $10,000 in soft
money in the 1994 election cycle — radically changed its approach
and became a major donor to both parties when ...