10 - LEGAL DEFENSE FUNDS

Not only do loopholes give contributors access and influence over members of Congress by helping them get elected, at least one gives contributors the chance to help to bail members out of trouble. When elected officials need assistance to pay their legal bills, they establish "legal defense funds." Because they are separate from candidates' campaign committees, campaign finance laws do not apply to contributions to legal defense funds. That means that contributors who have already given the maximum amount in hard money contributions to a campaign committee can still contribute to a legal defense fund.

The rules regarding legal defense funds differ in the House and the Senate. The Senate permits donations of up to $10,000 a year to legal defense funds, while the House limits contributions to $5,000 annually. In addition, the House permits corporations and unions to contribute to representatives' legal defense funds, though the Senate prohibits such contributions.

Many members of Congress have sought out contributions to help them with highly publicized legal battles. For example, former Rep. Dan Rostenkowski (D-Ill.) collected $1.34 million for his legal defense fund when he faced a legal challenge for the misuse of office funds. The contributors to his legal defense fund were familiar soft money contributors including the Tobacco Institute and Archer-Daniels-Midland chairman Dwayne Andreas.⁷⁷ Mr. Andreas also gave to former Sen. Bob Packwood's (R-Ore.) legal defense fund. Packwood's fund, established to help defray costs associated with a Senate ethics probe of charges of sexual harassment and official misconduct, raised at least $500,000 by June of 1995. Other contributors to the fund include the U.S. Tobacco Co. PAC, the Auto Dealers and Drivers for Free Trade PAC, and the Hotel Employees and Restaurant PAC.⁷⁸

Rep. Joseph McDade (R-Pa.) raised nearly $500,000 for his legal defense fund to pay legal bills arising from bribery and racketeering charges. Sen. Kay Bailey Hutchison (R-Texas) raised $884,000 for a legal defense fund set up to defend herself from charges that arose during her tenure as state treasurer.⁷⁹

President Clinton is the first sitting president to establish a legal defense fund. Contributions to his fund will help pay legal bills stemming from the Whitewater investigation and a sexual harassment lawsuit. Clinton set up more stringent guidelines for accepting contributions than those developed by the House and the Senate. The Clinton fund limits contributions to $1,000 and does not accept contributions from corporations, unions, or PACs. In addition, Clinton stopped taking lobbyists' contributions after he was publicly embarrassed for doing so. Despite the restrictions, and a prohibition against soliciting contributions for the fund himself, Clinton's legal defense fund raised more than a half-million dollars in its first six months of operation.