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Gingrich Vows Vote in Spring On Campaigns (Nov. 3)

Liberal Lobby Snared in Campaign Probes

By Thomas B. Edsall
Washington Post Staff Writer
Monday, November 3, 1997; Page A09

The national office of Citizen Action, one of the most effective grass-roots organizations on the left, last week became the first victim of political and union fund-raising investigations that have already damaged the Democratic National Committee and the reform wing of organized labor.

While the investigations also have highlighted Republican practices, the left is suffering the most. "Liberal donors [individuals and foundations] don't like being associated with what is going on now with money and politics," said Democratic pollster Stan Greenberg. "They feel a little tarnished by being involved in all this."

A Democratic Party fund-raiser was more outspoken. The congressional and criminal investigations into political and Teamsters union fund-raising have "been a . . . disaster. It had a chilling effect," he said on condition that his name not be used. The DNC has an unprecedented $15.3 million debt that has effectively prevented the party from giving substantial support to Democratic gubernatorial candidates in Virginia and New Jersey.

The Republican Party and conservative groups have not emerged unscathed. The inquiries have raised significant questions concerning the fund-raising relationships between the GOP and such organizations as Americans for Tax Reform, Triad Management and the American Defense Institute. In addition, a federal grand jury has been investigating a $1.6 million loan arranged in 1994 by then-Republican National Committee chairman Haley Barbour from Hong Kong businessman Ambrous Young to the National Policy Forum, a GOP think tank founded by Barbour.

Public opinion polls suggest that voters see corrupt and questionable behavior as characteristic of politics and politicians in both parties. But the immediate impact has been been felt most intensely by Citizen Action, the DNC and the Teamsters.

Citizen Action, which claims a nationwide membership in excess of 2 million, has been forced to close its national offices and dismiss its 20-member national staff in the wake of an investigation by federal prosecutors in New York into the 1996 reelection of Ron Carey to the presidency of the Teamsters.

Court papers and statements accompanying guilty pleas by three key members of Carey's reelection campaign describe a complex "swap" scheme in which Teamsters dues money was used to make contributions to Citizen Action and other organizations. In return, the documents state, the organizations helped channel money back to the Carey campaign.

Citizen Action's lawyers have issued a statement declaring: "No officer or employee of Citizen Action knowingly participated in this scheme or engaged in any financial transactions . . . with the knowledge that funds drawn from the Teamsters union treasury were to be fraudulently diverted to the Carey reelection effort." No one in Citizen Action has been charged with a crime in connection with the Teamsters inquiry.

Hetty Rosenstein, national chairwoman of Citizen Action, said 25 state organizations will "continue to carry out fully their consumer and environmental programs and grass-roots work." But, she added, "we are unable to raise enough money to maintain our national staff" as individual and foundation donors have been alarmed by adverse publicity surrounding the investigation.

For the revitalized progressive wing of labor and the Democratic Party, the closing of Citizen Action's Washington office is a major setback. The group was among those that coordinated drives to defeat the initiatives of the Republican-controlled House and Senate, often through "issue" campaigns with television ads designed to cause problems for Republican incumbents seeking reelection.

"Citizen Action was a wonderful operation and it had just moved to a new stage of sophistication," said Robert Borosage, co-director of the allied Campaign for America's Future. "On issue after issue, they were leaders in helping turn the right wing around last year."

Greenberg said the weakening of Citizen Action is particularly damaging because in recent years the strength of the left at the neighborhood and precinct level "has atrophied, with the exception of labor." He said this stands in contrast to the political right, which "has more genuine grass roots" through such organizations as the National Rifle Association, the Christian Coalition and the organized proponents of term limits.

Citizen Action, Greenberg said, stands almost alone as "the most effective grass-roots organization on the left, bar none," and it played "a big role in coordinating communications in the education of the public on a Republican Congress."

Republicans have moved quickly to capitalize on the situation. "This is a pro-Democratic organization that claims to be fighting for campaign finance reform," said Clifford May, communications director of the Republican National Committee. "It's just astounding hypocrisy."

On a larger scale, a number of Democrats and Republicans suggested that the setback at Citizen Action is the strongest example of problems in the Democratic Party and liberal institutions following the congressional and Justice Department investigations into campaign fund-raising.

Rep. Peter Hoekstra (R-Mich.), chairman of the House Education and the Workforce subcommittee on oversight and investigations, said "reasonable people are looking at this and saying this doesn't look very good." He said his subcommittee will investigate connections among Citizen Action, the Teamsters, the Clinton-Gore campaign and the DNC.

The scandal may spread beyond the Teamsters. Documents accompanying the guilty pleas of the Carey campaign workers state that officials of other unions were successfully solicited to give illegal contributions to the Carey campaign, often in cash that was then disguised in campaign reports.

The investigations "will probably force an examination by donors and foundations of nonprofit groups and their involvement in getting to the edges of politics," said a Democratic campaign strategist who works with both organized labor and some advocacy groups supported by liberal individuals and institutions.

He said he expects contributions from liberal groups to drop in the short term, which "makes labor involvement all the more central. They [labor leaders] are not going away, they won't be scared off. Democrats better understand how important labor is going to be until they can get these liberal funders calmed down and reassured."

Staff researcher Ben White contributed to this report.

© Copyright 1997 The Washington Post Company

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