Senate Panel Says It Will Take Up a Study of Campaign Fund-Raising

The Senate committee investigating political fund-raising announced Friday that it will refocus its efforts on a broad review of the current campaign finance system to lay the groundwork for enacting new reform legislation.

The fate of reform efforts, once considered unlikely to advance this legislative session, thus appears brighter even as Senate leaders battle over the best approach.

Meanwhile, as the Senate Governmental Affairs Committee wound up its seventh week of hearings, a Florida businessman testified that a senior White House official gave him detailed instructions on how to make a $1-million political contribution--more than half of which would be tax-deductible--and then asked him to shred the typewritten document.

The testimony of R. Warren Meddoff drew expressions of outrage from Democrats as well as Republicans, who said the allegations against former White House aide Harold M. Ickes, if true, could amount to a criminal violation.

But instead of continuing to focus on potentially illegal activities for several more weeks, the committee headed by Sen. Fred Thompson (R-Tenn.) will hear testimony on how to improve the campaign fund-raising system.

Its review will include scrutiny of independent expenditures and so-called soft money contributions, the largely unregulated funds supplied to the political parties by corporations, labor unions and wealthy individuals.

Thompson was joined by Sen. John Glenn of Ohio, the ranking Democrat, in a carefully worded statement disclosing the scheduling change.

“These will be public policy hearings, and will hopefully offer to other members of the Senate and the public the benefit of these hearings before campaign finance reform comes to the Senate floor,” they said. The timing of any vote on reform legislation remained uncertain, however.

Senate Majority Leader Trent Lott (R-Miss.) went to the floor to seek the Senate’s unanimous consent to take up campaign finance reform before Congress adjourns for the year, either Nov. 7 or 14.

But Minority Leader Tom Daschle (D-S.D.) strongly objected, arguing that such a vaguely worded plan probably would leave too little time for a full debate.

Sen. Russell D. Feingold of Wisconsin, the chief Democratic sponsor of reform legislation, dismissed the stalemate as “a relatively small misunderstanding” and predicted it will be quickly resolved, perhaps next week.

In his hearing testimony, Meddoff, a former Fort Lauderdale, Fla., export manager, described a chain of events that began last October when he approached President Clinton at a fund-raising dinner in Coral Gables, Fla.

He said he handed the president a business card with a handwritten message on the back reading, “I have an associate that is interested in donating $5 million to your campaign.”

“The president took two steps and came back and asked if he could have another one of those cards for his staff, and that somebody would get in touch with me in a few days,” Meddoff testified.

Meddoff, who originally told his story to The Times and some other news organizations, said he subsequently got a phone call from Ickes, then deputy White House chief of staff, from Air Force One.

He said he informed Ickes that his wealthy business associate, William R. Morgan of Richardson, Texas, wanted to contribute “under tax-favorable conditions.” Ickes said the campaign badly needed $1.5 million within 24 hours, and faxed him a two-page memo explaining how to make some contributions tax-deductible, he testified.

The memo, released by the committee, listed tax-exempt organizations--and their banks and account numbers--that Ickes said supported issues favored by the president. The memo suggested a $250,000 contribution for Vote Now ’96 of Miami, $250,000 for Defeat 209 of Los Angeles--which was working to defeat the anti-affirmative-action proposition approved by California voters last November--and $40,000 for the National Coalition of Black Voter Participation of Washington, D.C.

Ickes also asked that $500,000--which would not be tax-deductible--be sent to the Democratic National Committee.

Meddoff said Ickes later called him and asked him to shred the memo, but “there was no way I was going to shred a document at the request of a White House official.”

Sen. Don Nickles (R-Okla.) said that if Ickes did in fact make that request, it could constitute “an illegal act--obstruction of justice.” Meddoff said both he and Morgan have testified before a federal grand jury looking into alleged fund-raising abuses.

Sen. Joseph I. Lieberman (D-Conn.) agreed that the shredding request, if true, was “outrageous” and “possibly a violation of law.”

“This is another example of how off-track everything went,” Lieberman said.

Ickes has told the committee in a sworn deposition that it was inconceivable he would ever suggest destroying a document. He acknowledged sending the memo to Meddoff and called it an error of judgment--but not an illegal act.

Meddoff said Morgan never made any donations, however, because his primary condition--receipt of a Clinton thank-you letter--was never agreed to by Donald L. Fowler, then DNC general chairman.

DNC officials said they became wary of the legality of Morgan’s proposed contribution because Morgan and Meddoff were associated with the American subsidiary of a foreign firm. Campaign funds that originate in other countries are illegal.

Whether the committee’s hearings will return to the fund-raising activities now under investigation is unclear. GOP investigators insisted their probe will continue until the Dec. 31 deadline. But Democrats suggested that once the scandal portion of the inquiry is put on the shelf, it may stay there for good.

White House Special Counsel Lanny J. Davis said he is encouraged by the Senate’s new focus, noting that Clinton has said reforming the campaign finance system should be a top priority.

Times staff writer Marc Lacey contributed to this story.