For months, the pressure on President Clinton has been building.
Numerous visits to vote-rich California convinced him that a bill was needed to protect high-technology firms from frivolous yet costly lawsuits by investors. Accountants, securities firms, and high-technology companies had spent millions of dollars to state their case with a lobbying and public relations campaign.
But Clinton wanted to make sure that the legislation did not go too far in the other direction and shut out of the courthouse the unsophisticated people who had lost their savings through investment scams. After all, California was the state filled with thousands of victims who bought bonds issued by Charles Keating's ill-fated savings and loan empire.
Congress delivered a bill to Clinton and he didn't like it. Now, a president who strives to avoid confrontation finds himself locked in a bitter political struggle with his own Democratic Party chairman, Sen. Christopher Dodd (D-Conn.), who has been working for years on tightening the laws that allow aggrieved investors to sue.
The Senate is expected to vote today on an effort led by Dodd to override Clinton's veto of the bill that puts tough new restraints on the ability to sue publicly traded companies.
The House voted Wednesday 319 to 100 to override the veto. But the Senate fight will be much closer.
Clinton is anxious to avoid the first veto override of his presidency. Among other things, an override would suggest weakness as Clinton struggles with Republicans over the federal budget. To win, he must deliver a stinging defeat to Dodd, the man who plays a critical role in raising millions of dollars for Democratic candidates, including the president.
"With great regret, with great regret, I urge my colleagues to override this veto," Dodd said during the debate Thursday. "I can't tell you the hours we spent on this because I wanted the president to sign this bill."
Clinton's central objection is his belief that the bill creates excessively tough standards for investors to bring suits charging fraud by companies, their accountants and brokerage firms distributing the stock. Investors who sue must meet "an extraordinarily high standard" of supplying information about the intentions and activities of parties involved in the alleged fraud, Sen. Arlen Specter (R-Pa.) said during the debate Thursday.
The president also believes the bill is too generous with its "safe harbor" provision, which protects companies from being sued for the predictions and forecasts they make about future performance.
Clinton became personally involved late in the game because his top advisors were split on the merits of the measure. The top economic policymakers, Treasury Secretary Robert Rubin and National Economic Council chief Laura D'Andrea Tyson, wanted him to sign it. Political advisor Harold Ickes reminded him that a broad coalition of labor unions, consumer groups and liberal activists were strongly opposed.
Many state and local officials and regulators also opposed the bill, arguing it hampered their ability to protect pension and investment funds.
Clinton immersed himself in technical details, called law professors around the country, and decided late Tuesday to veto the bill.
In the preceding days, California lawmakers who represent the Silicon Valley and influential legislators around the country had been optimistic the president would support the bill.
But their confidence was shaken when they heard that William S. Lerach, a prominent San Diego attorney who is known for filing investor lawsuits, had been invited to the White House last Friday for a reception thanking top Democratic Party contributors. Lerach had earned the right to be there: In the last six months, as the bill was being negotiated, he had contributed $120,000 to the Democratic Party.
But the party guest list also included big contributors on the other side, representing a major accounting firm and an investment banking house.
The party division over the issue splits California's two Democratic senators. Dianne Feinstein is a champion of the bill, and Barbara Boxer is a fierce opponent.
Boxer read from a long list of California officials and organizations opposed to this bill. "The opposition to this legislation is broad and it's deep," Boxer said.
But Feinstein said she and Boxer have different constituencies. "My mail is maybe over 100 to 1" for the bill, she said.
Clinton can win today if he persuades such Democratic liberals as Edward M. Kennedy of Massachusetts, Barbara Mikulski of Maryland, and Tom Harkin of Iowa to change their votes and support his veto, consumer activist Ralph Nader predicted.
"If he loses this fight, it's because the head of his party beat him," Nader said.