The McCain Irony: Reform's Champion Rakes In the Bucks

By John F. Dickerson and Viveca Novak

The price of admission was $1,000 for the high-tech executives gathered last June at the Washington mansion of America Online honcho George Vradenburg. Guest of honor Senator John McCain took the balcony. "The difference between me and the Democrats," McCain joked, "is that the Democrats want everyone to have a house. I want everyone to have a house like this."

Why were all these smiling tech gurus, including AOL chairman Steve Case, clumped around McCain? Did they think the G.O.P. long shot would be the next President? Maybe, but they were more certain he will continue as chairman of the Senate Commerce Committee, which oversees their companies. "We can't afford not to contribute," says a lobbyist.

Is this any way for a "maverick" to behave? Last week Elizabeth Dole dropped out of the presidential race, crying poverty. Meanwhile, McCain's day job lets him play at Washington's favorite pastime, taking donations from corporations that can be made or broken by his committee.

The irony is that the champion of campaign finance reform uses the system he runs against to get the money to stay in the race. It's working. He's second in New Hampshire. It "rings a little hollow," complained Senate majority leader Trent Lott of McCain's efforts.

Guilty, says McCain. "I know there is an appearance problem. But I have never pressured a lobbyist to contribute...I am sure there are more than a few who wished I had done their bidding." To reject donations by companies he regulates--as some suggest--would put him out of competition, he says. He also says the donations are too small to be corrupting--$1,000 from individuals and $5,000 from political-action committees.

McCain's reforms are aimed not at individuals but at the unlimited amounts that corporations, unions and others can give to a political party, so-called soft money. Last week his bill to outlaw those donations died in the Senate in what has become almost an annual ritual.

The harder McCain pushes for reform, the bigger a target he becomes. Republicans who want to keep the spigot open have spread rumors of dark deals the Arizonan has cut for donors. One such story: his change of mind on rules to ease export limits on technology to scramble and unscramble everything from computer images to phone conversations. McCain's worries about national security kept him from bending to Silicon Valley's arguments that such controls would hamper U.S. companies' ability to compete. After a long lobbying effort, he came around--though just how much is a matter of debate. He says the national interest could be protected by giving the President a veto over exports.

A clear-cut case of McCain's changing his position for campaign cash hasn't surfaced, and compared with those of some presidential rivals, his corporate donations are puny. Industries that are in his thrall one week, he points out, are often pummeling him the next. He harangues cable companies whose rates he says are too high. Long-distance carriers think he favors local phone companies. "He feels he's entitled to take your money at the same time he feels he's entitled to kick your ass," says a telcom executive. This week he will disappoint another set of donors, proposing to end oil and gas tax breaks to pay for school vouchers. Oil and gas companies have given more than $78,000 to his campaigns in recent years.

Still, it's not likely to stop them from ponying up next time a McCain fund raiser calls. And their contributions will keep the McCain contradiction afloat, giving him resources to keep rising in the polls by railing against the system.

--By John F. Dickerson and Viveca Novak