How Much Scandal Is Needed?

So now we know that Republicans do it too. The Republican National Committee has announced it is returning $102,400 in campaign contributions illegally made by a Hong Kong real estate firm in 1991-93.

The Republicans said they thought the donations were legal since they came from an American subsidiary of Young Brothers Development of Hong Kong. After closer inspection, however, the GOP determined that the American subsidiary had no substantial assets of its own. The conclusion, therefore, was that the money in fact came from Hong Kong.

The confusion should be no surprise, given the murkiness of the law governing political contributions from firms based overseas. Foreign contributions are illegal. But money may be accepted from a U.S. subsidiary so long as the money clearly originated in this country. That invites using the subsidiary as a conduit for laundering illegal campaign funds.

Another legal fine line plagued the Democrats, who are returning $3 million in 1996 campaign contributions from questionable foreign sources. The law allows legal permanent residents to contribute to campaigns. Some of the Democrats’ contributions came from people who had been legal residents of the United States but were no longer in the country, a situation that left their residence status in limbo.

There would, we think, no longer be any confusion if the campaign reform bill sponsored by Sens. John McCain (R-Ariz.) and Russell D. Feingold (D-Wis.) became law. It prohibits contributions by anyone who is not eligible to vote in a federal election. This change should take the “foreign” out of fund-raising.

In another problem for the GOP, Young Brothers guaranteed a $2.2-million loan to the National Policy Forum, a nonprofit advocacy group founded by former GOP Chairman Haley Barbour. The forum in turn passed the money along to the Republican National Committee for use in the 1994 congressional campaign. Barbour argued that there is no law forbidding nonprofits to receive foreign donations. Well, there should be when the money could land in a partisan election campaign.

Congressional investigators must examine all these transactions closely. But members of Congress know the election laws--and their loopholes--better than anyone else. They don’t need an investigation to tell them to do what is right: Pass the McCain-Feingold bill now.