Washington Bulletin

Washington Bulletin


Asiagate, Day 8: Haley Takes No Prisoners

Haley Barbour turned in a performance before the Senate Governmental Affairs Committee Thursday that again proved he is the smoothest, most charming and articulate politician in the nation, if not the history of the planet. In baseball, they call what Barbour did yesterday "clutch"—a high-pressure performance that turns around the game in a crucial moment. Barbour took the air out of the Democratic charges about the National Policy Forum and the Young Brothers loan. It's still not a particularly attractive transaction, but Democratic demagoguery on this issue will never be quite the same. To continue the baseball analogy, if Barbour didn't hit a home run, it was at least a stand-up double, and, for now, Democratic counsel Alan Baron should be headed for the showers.

After the committee had broken for lunch, it came back at 2:30 p.m. with the room abuzz as it had never been before. The press tables were as full as they've ever been, CNN cut to live coverage, and a throng of 20 cameramen crowded around Barbour at the witness table, flashing pictures from every angle. Barbour, of course, seemed unfazed. He launched into a long and combative opening statement that should find it's way into some college textbook on rhetoric. Barbour made no apologies whatsoever, calling the charges against NPF "inaccurate, incomplete, misleading, misinterpreted, and outright false"; he was funny in his folksy southern way: "You know, Senators, I was born at night, but it wasn't last night"; and he skillfully brought up Sen. Glenn's troubles in the Keating Five scandal as a caution against letting ethics cases be tried by innuendo.

Then it was Alan Baron's turn to question Barbour. Here was the moment everyone had been waiting for, Barbour at the Democrats' mercy at the witness table. Baron made it clear he was going for blood from the beginning, playing a tape on the monitors in the hearing room of Barbour telling Tim Russert on Meet the Press that the NPF had not received any foreign contributions—"period." Now, Baron asked Barbour, presumably positioning for the kill, was that you on the tape? "I was the one who wasn't Tim Russert," quipped Barbour. Baron then brought up a contribution that did come from overseas—gotcha! But it turns out as soon as Barbour had found out about this contribution from the Pacific Cultural Foundation he called Russert and apologized. "I said I'd made a mistake," Barbour explained yesterday. Not so sinister after all.

Then Baron brought up another suspect NPF contribution from Panda Industries, Inc. for $50,000 (Baron at first got the name wrong, which was typical of his lackluster grilling of Barbour). But, as Barbour pointed out, Panda-related entities gave $250,000 to the DNC! The difference is that it is legal for the NPF, a non-profit, to accept foreign contributions whereas it isn't for the DNC. And the DNC hasn't returned the Panda money yet, so it's not even clear that the money is foreign. Strike two for Baron—and it continued from there. Barbour succeeded in dispelling entirely or at least defusing many of the major concerns about the NPF–Young transaction (some of which were expressed in Thursday's Washington Bulletin, which looks overstated in light of Barbour's performance yesterday):

—Democrats have portrayed the RNC as desperate for cash in the run-up to the November elections (a reminder: the NPF owed the RNC money; it got a loan from Signet Bank guaranteed by the Hong Kong money; it then paid back $1.6 million to the RNC in late October, 1994). But Barbour produced a chart yesterday that seems to suggest the RNC had plenty of soft money—the account into which the NPF loan re-payment went—in the final weeks of 1994. Barbour insisted: "The RNC never needed any of the loan re-payments to do what it did in the 1994 elections." Barbour also pointed out that Democrats have been wrong to say the money went to help federal candidates, because it was soft money that couldn't be spent on federal elections. The Democrats will argue about the numbers and there are statements and documents that suggest Young was told his loan guarantee would help in the elections, but Barbour won back important ground on this whole question.

—Barbour insisted that he didn't know that the source of the loan guarantee was foreign. This is a tough one, because so many people say they mentioned it at the time. But Barbour did OK on this point. Young supposedly told him that he had to get the arrangement approved in Hong Kong. But Barbour said he didn't understand him and pointed out spots in his deposition where Young himself said he knew Barbour didn't understand what he was saying (considering both Barbour, with his southern drawl, and Young, with his broken English, are heavily accented—these must have been amusing exchanges). Fred Volcansek, who was involved in setting up the arrangement, said he mentioned at a meeting with Barbour that the source of the loan guarantee was foreign. But again Barbour said he didn't hear that—and pointed to someone else who was there who doesn't remember it either. Barbour insisted that he didn't pay any attention to the source of the loan guarantee because legally it was a "totally irrelevant issue" (at the same time, Barbour says he realized it was better politics that the source of the money be domestic). Democrats will never believe Barbour on this point, but he got the best of them on it Thursday.

—Barbour also scored points on the whole question of the separation of the NPF and the RNC. Here, Barbour benefited from the Democratic over-reaching. The NPF may have been a dumb idea, and it may have been too closely tied to the RNC, but it was not a "sham" organization explicitly set up to launder foreign money into the RNC—that notion is just absurd and Barbour demolished it yesterday. He made repeated references to the Democratic Leadership Council—another tax-exempt group—and said the NPF was modeled on its work. Then glossy flyers were passed around with quotes like "the DLC [is] the intellectual center for the Democratic Party," which is what Joe Lieberman happened to say about it (Barbour and Lieberman had a good-natured exchange over this). Democrats have trotted out statements from former president Michael Baroody saying the NPF–RNC separation was a "fiction," but Barbour pointed out spots in his testimony Wednesday where Baroody said in most respects they were indeed separate. There is still the matter of Barbour being the chairman of both organizations and the heavy NPF debt to the RNC, but Barbour again fared surprisingly well on this point.

Perhaps the toughest moments for Barbour came when he was questioned by Fred Thompson himself. Thompson didn't help Barbour, clearly thinking he is a big boy who can fend for himself. In fact, the Thompson–Barbour exchange was reminiscent of the scene in the movie Heat when Al Pacino and Robert De Niro sit down at a diner and exchange ruminations about being cops and gangsters—larger-than-life personalities almost too big to play together in the same scene. Thompson said at one point: "It's an appearance business we're in, isn't it?" Barbour readily agreed—and they're both masters at it. Thompson got the better of this exchange though, in effect telling Barbour he had played fast and loose with the Young loan and the RNC still should pay it back. Pointing out that Young had relied on Barbour to make sure the NPF obligations were met, Thompson said: "I don't think that sends a very good signal in terms of personal responsibility or anything else." Thompson also questioned how Barbour could meet with Young, a foreign citizen, on his yacht in Hong Kong and not know the source of the money was foreign. This is how Thompson managed to steal some of Barbour's thunder and headlines—a master out-maneuvering another master.

But, overall, it was a good day for all Republicans. The Young-NPF-RNC transaction will remain—understandably in many ways—a rallying cry for proponents of campaign finance reform. And Democrats will try to get Young representative Dick Richards to contradict Barbour's testimony today. But it seems it will be difficult for Democrats to continue to beat on the NPF question much longer. Which is bad news for them. Because Republicans plan to call Charlie Trie-related witnesses next week, turning up the heat again on the foreign money that poured into the DNC in 1996 in a way that makes the NPF transaction seem a piddling point. And it is becoming clear to everyone that Janet Reno's Justice Department has been compromised in it's handling of the Asiagate investigation. These are questions Democrat will, like it or not, now have to confront—without Haley Barbour as cover.

Fight Fire With Fire

CNN boycotted the hearings until a Republican was in the dock; now Republican members of Congress ought to boycott CNN. Over the weekend, Republicans congressmen should refuse to appear on the network's shows—and publicize their reasons for so doing.

The Aftermath: Enter The Moderates

By most accounts, Wednesday evening's meeting of House Republicans was therapeutic. The rebels don't feel beaten; they're psyched. They think that the sense of the conference is that Gingrich gets one more chance, and that the crisis has given the conference the opportunity to discuss openly the problems they've all known to exist but been afraid to confront.

Bill Paxon and Tom DeLay had the best receptions. Paxon got a standing ovation; only Dick Armey pointedly refused to rise. Today members who've never been part of DeLay's fan club have approached him to say they appreciated his no-nonsense, here-are-all-the-facts approach.

The fireworks are over for now: House Republicans no longer seem to be in the mood for show trials. Conservatives in particular made it clear that any attempt to strip Majority Whip Tom DeLay of power would be taken as casus belli. They understood that the liberal wing of the G.O.P. was using the leadership crisis as an opportunity to take over the conference. And so moderate plans to install Reps. Livingston, Hastert, and Dunn in place of the current crew are off. But it appears likely that Gingrich will listen to them more, and his official deputies less, no matter whether anyone's title changes. (News accounts have Gingrich also elevating conservative Chris Cox; don't bet on it.) Livingston is the most conservative of the members of Gingrich's new favored circle—and since 1994 even he has shown himself to be more interested in making the House's trains run on time than in changing the world. (The typology is Robert Novak's.) If Gingrich hews too closely to this crowd, he'll lose touch with the bulk of his conference. It's a recipe for continued instability.

One More Note on Dick Armey

This is a site with a point of view; we want to clarify what it is on the Majority Leader. We've admired him for years. Nevertheless, we have to report the facts as best we could divine them. We are not among those who question Armey's character; our own judgment is that people in a panic often act out of character. And whether he's damaged himself permanently, as Al Hunt gleefully argues in today's Wall Street Journal, is an open question. If so, it would be a real loss.

For a selection of recent Washington Bulletins click here

Updated By:
Rich Lowry - National Political Reporter
Ramesh Ponnuru - National Reporter



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