The New York Times

Saturday, March 4, 2000

The 2000 Campaign: The Tactics; Wealthy Texan Says He Bought Anti-Mccain Ads

by Richard W. Stevenson with Richard Perez-Pena

A wealthy Texas businessman who is one of Gov. George W. Bush's biggest campaign contributors said today that he had paid $2.5 million for political commercials that sharply criticized Senator John McCain and promoted Mr. Bush's environmental record.

The businessman, Sam Wyly, who recently sold two software companies he co-owned for $7.9 billion, said he and his family had paid for the advertising, whose source had been a mystery in recent days, to highlight environmental issues at a time when the public is paying attention to the presidential race.

But Mr. McCain's aides accused the Bush campaign of being behind the advertising and called them a scurrilous effort to evade campaign finance laws.

They said the Bush campaign was trying to steal the election by placing a huge amount of anti-McCain advertising on the air in New York, California and Ohio just days before primaries that could decide the Republican presidential nomination.

The law is somewhat fuzzy when it comes to advertising about political issues paid for by people or groups outside of a campaign, using money that is not disclosed by the candidate as a contribution. But it generally bars a candidate from coordinating such an effort with outside supporters, and it prohibits the commercials from making direct appeals to vote for or against a particular candidate.

"There is no question in our campaign's mind that the ads are being sponsored, coordinated and managed by the George Bush for President campaign," Rick Davis, Mr. McCain's campaign manager, told reporters in New York. "I think it's incumbent on the Bush campaign to prove somehow that they are not involved in this incredible act."

Mr. Davis offered no direct evidence to support his assertion, but cited a tangle of personal, business and political relationships between Mr. Wyly and his family and the Bush campaign to suggest that their interests were so close as to be indistinguishable.

Speaking at a news conference on Long Island, Mr. Bush denied any link between Mr. Wyly's commercials and his campaign.

"We had no knowledge whatsoever that Sam Wyly was going to run this ad," Mr. Bush said. "There is no coordination. I can't put it any more plainly to you: I had no idea the ad was going to run."

In a telephone interview from Dallas, Mr. Wyly had the same message. Asked if he had any contact with the Bush campaign, even indirectly, over the commercials, Mr. Wyly said, "Absolutely not."

Mr. Wyly said that "of course" he hoped the commercials would benefit Mr. Bush, but added that he had laughed as the commercials were being prepared at how surprised Mr. Bush and his team would be when they learned about what he was doing.

If nothing else, the episode gave Mr. McCain an opportunity to turn public attention back to the centerpiece of his agenda, an overhaul of the campaign finance laws.

"I think maybe the Bush campaign is out of money and somebody's putting in $2 million to try to hijack the campaign here in New York," Mr. McCain said on the NBC News "Today" program before Mr. Wyly revealed his role.

"Nobody knows where it came from," Mr. McCain said. "We'll probably find out, but probably too late. This is why campaign finance reform is so important."

The commercials, which began running on Wednesday on local stations throughout the three states, open with a picture of Mr. McCain superimposed over smokestacks belching dirty air.

The voiceover says Mr. McCain voted against solar and renewable energy programs, leading to "more use of coal-burning plants that pollute our air."

The narrator goes on to say that Mr. Bush "led one of the first states in America to clamp down on old coal-burning electric power plants" and that the Texas governor was "leading so each day dawns brighter."

The commercial never explicitly urges a vote for Mr. Bush or against Mr. McCain.

Environmentalists said that the claim that Mr. Bush had cut down on coal-burning plants was exaggerated, and that while Mr. McCain had voted against spending programs to promote solar power and renewable energy sources in the case cited, he had also supported them in other votes.

The commercials are part of a rapid expansion in the use of so-called issue advertising. Issue ads can be paid for by the political parties -- a technique President Clinton used to his advantage in 1996 -- or by outside interest groups.

As long as they do not contain overt appeals to vote for or against specific candidates and are not directly coordinated with a candidate, they are as a rule not subject to regulation under campaign finance laws, meaning that the sources and amounts of money behind them do not have to be disclosed.

While some of the groups behind issue advertising are vague about their membership, Mr. Wyly's effort was a rare instance in which commercials were aired without any hint of their origin.

"The secrecy aspects of this are taking campaign finance problems to yet another new and dangerous level," said Fred Wertheimer, president of Democracy 21, a group advocating tighter campaign finance laws. "What we're seeing here is the use of unlimited, undisclosed money to influence a federal election, and that's totally at odds with the whole notion of campaign finance disclosure."

The campaign finance laws are vague about what it takes for issue advertising to step over the line into run-of-the-mill political appeals.

The McCain campaign's argument today was that Mr. Wyly, his family and his advisers, in putting the commercials on the air, did not need formal consultations with the Bush camp to know that their effort would amount to a direct boost for their candidate.

Mr. Wyly and his brother, Charles, gave more than $200,000 to Mr. Bush's two gubernatorial campaigns in Texas.

Charles Wyly is a "Pioneer," the designation given to the top fund-raisers for Mr. Bush's presidential campaign, those who have brought in at least $100,000. An investment fund run by the Wylys has received business from the University of Texas, whose board was appointed by Mr. Bush.

A Republican political consultant from Texas who helped put the commercials on the air, Jeb Hensarling, was once a business associate of the chairman of the Pioneers, James B. Francis Jr., one of Mr. Bush's closest friends and advisers. The advertising firm that bought time on television stations for the commercials in New York has a long record of working with Gov. George E. Pataki, who is helping run the Bush campaign in New York.

People in the Bush camp said they knew of no communication between Mr. Wyly and his team and the Bush campaign over the advertising. Mr. Francis, for example, said in an interview that he had not even spoken to Mr. Hensarling in about six months.

Mr. Wyly said he had been thinking for some time about creating an organization, Republicans for Clean Air, to promote his message that the party should do more to clean up air pollution.

Mr. Wyly owns a stake in a power company,, that bills itself as producing and selling electric power generated with a minimum of environmental damage -- a claim disputed by environmentalists.

But Mr. McCain's campaign said Mr. Wyly had frequently donated money to Republicans judged by environmental groups to have less than sterling reputations when it came to working for clean air and water. And they said it could not be a coincidence that Mr. Wyly chose the days leading up to the most critical round of primaries in the campaign to begin airing the commercials in New York, California and Ohio, the three states with the most delegates at stake.

Mr. Wyly went public today after the McCain campaign on Thursday asked the Federal Communications Commission, which Mr. McCain oversees in his role as chairman of the Senate Commerce Committee, to look into whether the commercials adequately disclosed who was paying for them.

The McCain campaign did not raise the issue of campaign finance laws, but rather whether the commercials met a requirement of the Communications Act of 1934, which holds that television stations must say who has paid for commercials other than product advertising.

Rob Allyn, a media consultant to Mr. Wyly, said Mr. Wyly was now providing stations and networks with additional documentation. He said that Mr. Wyly had not been asked to change the commercial itself by including his name on the screen, and that the commercials would run as scheduled through Tuesday.


A front-page article on Saturday about Sam Wyly, the Texas businessman who paid for advertising critical of Senator John McCain, referred imprecisely to a provision of campaign finance law dealing with independent ads that appeal directly for or against a candidate. While political parties using unregulated "soft money" donations and corporations and unions cannot make such direct appeals, individuals operating independently of a campaign are permitted to do so.