FBI Probes Dole TV Ads
The FBI is investigating allegations that top staff members of Bob Dole's 1996 presidential campaign received kickbacks from prominent media consultants, the Voice has learned.
Political operatives from the Dole '96 campaign told the Voice that they have been contacted by the FBI in recent weeks, and asked about charges of hidden financial arrangements within the campaign.
"There has been talk for months about some sorts of deals that were made for the media buying and telephone solicitation," said a Dole campaign operative who was called by the FBI. These deals, the source said, are alleged to have involved inflated contracts for purchasing TV commercial airtime--known as the "media buy"--in which a portion of the fee would be given back to high-ranking staffers in the campaign. This source has told the FBI that he had no firsthand knowledge of any impropriety.
Through a press aide, Dole told the Voice he has "no reason to believe" these allegations are true. The FBI issued a standard statement: "We cannot confirm or deny that any investigation is going on," said a spokeswoman.
The Dole campaign received $75 million in public funds, and spent approximately $40 million on media, using many of the party's best-known operatives. An FBI investigation could disrupt the delicate mating dance between Republican candidates and the party's top consultants just as presidential hopefuls are shopping around for their 2000 campaigns.
The FBI inquiry, according to former Dole staffers and advisers, appears to be far-reaching. Central to the investigation is a memorandum, entitled "Foundational Problems of Dole '96 Campaign Staff, or 'Whatever,"' written by a top Republican official after the campaign. The memo said in part that "[Campaign officials] were on the take, and bitter fights erupted over who was getting the most."
The memo, which was cited in the November 1997 issue of Capital Style magazine, continued: "Most of the decision makers in Dole '96 were motivated by one common goal--to 'cash in' once he became Presi-dent....At one point the observation was made in a senior staff meeting that it would generally be best if people chose to enrich themselves after Dole wins, not before. This was not well-received."
One of the FBI's questions has been to determine who wrote this biting document, and whether he or she had genuine knowledge of such kickbacks. Two former Dole advisers told the Voice that they told the FBI the author was Kurt Anderson, former political director for the Republican National Committee. Anderson did not return several messages seeking comment.
GOP sources told the Voice that the FBI asked questions about contracts awarded to a New York--based telemarketing and polling firm run by Steve Goldberg. Goldberg did not return Voice messages.
One obvious question is when Dole--who now works for the D.C. lobbying firm of Verner, Lipfert--got wind of such arrangements. On Monday, Dole press aide Joyce Campbell told the Voice that the Capital Style article was the first time Dole had heard allegations of kickbacks. Campbell said Dole "has no reason to believe that they are true." She added that Dole "has not been contacted by the FBI in regard to this investigation," and that he was "not aware" of anyone who worked for the campaign being interviewed by the FBI.
Some former Dole staffers and other political professionals said they were unsure whether a kickback structure is specifically prohibited by law. One suggested, for example, that individuals running California ballot initiative campaigns are sometimes paid through a percentage of airtime purchased.
But Ian Stirton, a spokesman for the Federal Election Commission, scoffed at that notion, pointing out that presidential campaigns receive tens of millions of dollars in strictly regulated federal funds. "Federal election law requires disclosure of how the money comes in, and how it is spent," Stirton told the Voice. Speaking in general terms, Stirton said: "There's nothing in the law that says you can't have kickbacks, but it's not necessary to say that. I can tell you right now that if you're cloaking how the money is spent--if somebody's got some kickback deal going--that's not going to be looked upon favorably."
A Dole campaign adviser acknowledged that it would be "ethically repugnant" for campaign staffers to have received a percentage of the media "buy" without the candidate's knowledge.
No Dole staffers or GOP consultants contacted by the Voice would say that they had firsthand knowledge of any improper financing. Several, however, expressed the opinion that the campaign wasted large amounts of money. Haley Barbour, who headed the Republican Party during the '96 campaign, "thought they pissed money away," said a close associate.
And, according to Bob Woodward's book The Choice, former Dole adviser Bill Lacy had warned both Dole and campaign manager Scott Reed in early '96 that the campaign was spending too much money.
A Dole campaign adviser said the FBI was interested in the unusual arrangements by which the campaign, from June through early September 1996, produced and purchased airtime for its TV spots. Veteran GOP consultants Don Sipple and Mike Murphy created and ran their own company, called New Century Media, as a separate operation within the campaign.
In early September, according to published accounts, campaign manager Scott Reed and pollster Tony Fabrizio were frustrated by their inability to control Sipple and Murphy, and terminated the campaign's contract with New Century. This was at the same time that $62 million in federal funds became available to the campaign. A GOP source says he told the FBI that, upon being terminated, Murphy and Sipple refused to show their accounting books to the campaign.
In the last nine weeks of the campaign, then, decisions about millions of dollars for media advertising were being made by the campaign's top political officials. One GOP source told the Voice that this is the period that the FBI is particularly interested in. However, the range of people contacted by the FBI suggests that the entire campaign, even as far back as the early '96 primaries, is under investigation.
However sweeping the inquiry, several normally loquacious GOP consultants are reluctant to discuss it. Attorney Gary Bostwick, who has represented Sipple in other matters, declined to give out Sipple's phone number and said that Sipple is generally not speaking to the media since a Mother Jones story last year published allegations that he had abused his first two wives. (Sipple denied the charges; his suit against the magazine was dismissed.) Sipple has reportedly discussed working on the presidential campaign of Texas governor George W. Bush Jr.
Murphy, Fabrizio, and Reed did not return messages left at their offices all last week.
Who's the Hack?
Is someone hacking into computer systems to provide Mother Jones with stories?That's the sensational charge made in a Thursday Washington Post column. In a May/June Mother Jones article called "So You Want To Trade With a Dictator," Mother Jones contributor Ken Silverstein exposed several documents from the office of Washington lobbyist Anne Wexler. The story details how Wexler helps companies who do business with brutal foreign governments keep Congress from cracking down on them. One especially interesting item was a list of incoming phone calls to Wexler's office on September 18, 1997, including an officious wedding anniversary greeting from The New York Times's R.W. Apple Jr. and his wife ("Heaps of Love!!").
Post columnist Bill McAllister wrote about the piece on Thursday, quoting Wexler saying she "can't figure" how Silverstein got that call list. "We figure someone hacked into our computer," she said.
This offends Silverstein, whom the Post did not call for comment. "Hacking into computer systems is a crime," he told the Voice. McAllister points out that Wexler "said she believed someone had broken in, but didn't say--nor did I--that it was the magazine." A fair point. But if it had been the other way around--that is, if Mother Jones implied that Anne Wexler was benefiting from someone's illegal hacking--don't you think the Post would call Wexler for comment? McAllister's defense is that "the magazine had never suggested that [Silverstein] was available for an interview or told me how to reach him."
Silverstein's suggestion: "How about 411? I'm in the D.C. phone book."
Media Scorecard: Congressional hearings can contain at least as much grandstanding as newsbreaking. But recently it seems like The New York Times has decided they contain no news at all. A hearing last week revealed that, even after disclosures that the New York State Psychiatric Institute gave experimental doses of the now-banned drug fenfluramine to dozens of mostly black and Latino New York kids, such experiments continue to go on, with the FDA's blessing. This did not prompt the paper of record to add to the one measly story it's published on this controversy (initially broken by the New York Post; see Mark Schoofs's story in this issue for more). Similarly, Congress has for weeks been openly investigating charges that the garment workers' union has colluded with manufacturers against some members' interests. On Monday this ended up on page one of the Times--weeks after the Voice put this story on its cover....What's a paper to do when a member of Congress from the party of virtue--Indiana's Dan Burton--calls the president a "scumbag"? The Washington Post and Chicago Tribune put the word in headlines; a Daily News column used "s- - - bag"; the ever-proper Times fell back on "a vulgarity for a condom."
Research: Kaelen Wilson-Goldie
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