IS THERE ANYTHING in the charges of finance irregularities in the Gary Hart campaign that raises a serious question? There are three items.
The first concerns contributions by Newport Beach, Calif., video producer Stuart Karl in 1984. Last week the Miami Herald disclosed that in July 1984 Mr. Karl's company paid for $15,802 worth of convention materials for the then-broke Hart campaign. Mr. Hart replied that these were "loans," for which the Hart campaign was billed. Actually the Karl company had already billed the Hart campaign for $96,000 for otherwise unspecified "video production" -- a debt that was settled in September 1986 for $9,600. The Federal Election Commission, as Mr. Hart notes, approved this settlement along with many settlements with what appeared to be arms-length creditors. That doesn't settle the question, which is plainly raised by these transactions, of whether Mr. Karl and his companies funneled money into the Hart campaign in amounts greater than the $1,000 personal contributions allowed by the law and without the disclosure required by the law. That's a serious charge that deserves investigation by the FEC.
Second, there is the fact that a man named Dennis Walto worked as an advance man for the Hart campaign while on one of Mr. Karl's payrolls. Mr. Hart can't plead ignorance here: Mr. Walto traveled with him often in 1987 and 1988, and after some hesitation last week Mr. Hart admitted that he knew Mr. Walto was on the Karl payroll. That should have set off all kinds of alarm bells in the head of a candidate who, like Mr. Hart, has been familiar with the federal campaign finance laws for 15 years. Employees of other companies are allowed to work in campaigns, as Mr. Hart says, but only for an hour per week, or their time must be counted as a contribution to the campaign. Again, a serious question is raised of whether Mr. Karl and the Hart campaign worked together to plow money into a campaign in violation of the contribution limits and disclosure requirements.
Finally, a serious question is also raised by the sale and leaseback of a computer system in February 1984, in which the Hart campaign got $30,000 cash ($10,000 of it from Mr. Karl and $20,000 from another Orange County businessman) and then got to lease the computer back for the rest of the campaign. Such transactions, depending on the circumstances, can be an illegal attempt to pump cash into campaigns above the contribution limits. Preventing big givers from gaining undue influence through large and secret contributions was one of the primary purposes of the campaign finance law.
Mr. Hart has always claimed to hold himself to a high standard of conduct in such matters, and has emphasized many times his adherence to campaign finance laws and his refusal to take PAC money. These claims are certainly endangered by the allegations and revelations of the past week. The FEC should act quickly to get to the bottom of them.