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-2- Paul Bqual. (Independent Insurance Agents of Imerica) :i Look, was thiw an exercise, to som., extent, in relaticanshipbuil'ding? Absolutely,.Wallaces The lobbyists are so intent on building relationships, they even take congressional staf'fsrw on trips. wining and dining the young administrative, assistants who handle the l~egislative detailw. Critics call it a blatant effort by lobbyists to curry favor. Kathleen O'Railly, (National Insurance Consumers organization): It'w glad handing, and it is essentially saying 'in exchange for us pampering you and making lif': comfortable, foryou when youareout of town, we want you to make life comfortable for us when you are in the legislative process.' Waillace:~ But when we asJted mennbers of Congress why they and their staffers go on these trips, they said we were the bad guys for following them around. Jo,hn Breaux (Lonisiana 3enator) : You ought to be ashamed of yourself' in reality. I` mean your program's' becoming like the National Inquirer with a TV camera. Wallacee Membere of Congress accept more thaa a thoueand! trips a year from~ oorporate lobbyists, some to raise money for charity, far more to oxchangeinformation. And many are soheduled for iiua-drenehed, resorts while it' s cold andi forbidding here in Washington. All of it ie legal, within thee rules Congress writes for itself, but some have called it legalized bribery. Two weeks ago. the action wasi at the exclusive Boca Raton Resort and Club on: 8lorida's Qold Coast where rooms go for more than three hundred, dollars a night. We first went there~ a year ago and found seventeen present and former lawmakers having,a good time, courtesy of companies like U.S. Tobacco. Tennis Club Announcer: We will see you next year, January 7',, 8, 9forthe: . 1994 Corporatw Charity,Classic. Wallaces Wa're not oure they meant us, but we decided to come back too. We set up aur casleraw to sse wbLiChmembers of Congress would show up. But t'he event sponsor were making their own, preparations. The, resort has tight security, but U.S. Tobacco brought its own guards. The back section of' the tennis oompl'ex was

JiAi6J 211 '94 13:59 FROM WMS,-FHIO'WST!QM PqGE.004 - 3'.- cordoned off. only lawmakers and lobbyists couldigot cloae.. When one of' our people, who waw a, guest at the resort and wearing a hidden camera, tried to peek at the tenmis courts, a~~.guard rushed up to ask for idrntificationiand told him to l.a've,. There, were other changes. Last y.ar, the corporate sponsors got top billing. (Visual oE'Sponsors oa sigm: U.S. Surgical: Flarwiak, Baker a Fiorej~ Patton, BogQs rr Blowt Air Products; F+orstmann Littlei & Companyl Prudential Sacuritiest Skaddan, ARPS, Slate, Meagher & Flom; Texaco) But this year, only the charities that would benefit were listed, with no mention of sponsors like U.S. Surgical. Texaco, andiPrudential Securities. ('Visual of Charities signs!: Great Plains'Food Baakj Mississippi Special olympiQs'i International Institute for J1looholisst Bducatioa and, Tra 'ininQ) . Breawei AA charity eveu't--there's nothing wronng with it as long as it complies with all the rules, and regulations. Wallace: Louisiana Senator John Breaux has attended the Boca Raton .vent every year since it started'in 19'90. Brsauxii ]L11 the money that is raised goes to! pay for the cost of the ewent, andithe rest of it'all goes to charity. Now, I'm not sure what the, return is, but I guarantee it' s better thasi, most fund-raising, events for charity that I've attended. Wallace: All money from the event comes from aor c>rate sponsors;no tickets are sold. U.S. Tobacco turned down our request for an interview but said off cam.ra that sponsors this year are giving sixty-four thousand fivohundr.d dollars to charity. But the cost of putting, on the weekend, according to v.S~. Tobacco, was more than one hundred fifty thousand dollars., For instance, th., lobbyists got .ighteen golf and tennis pros, like Ilia Wastase and Roscoe, Tann.r, to play with the, ]lawsakerw.. Just hiringg the pros cost in excess of'seventy thousand dollars, more than the event raisedfor charity. Frank Lautenbergi(N.w Jersey Senator) r When the trappings to get you therei are- cost more to provide tbai benelit to the charity, that doeen't make sense, and you don' t have to be, a rocket scientist to figure, that one out.

JA'h'J' 2',1 ' 94. 14: 00 FROM VMS-HOUSTON -4- PAiGE. 005 Wallace: Last spring, Naw Jersey Senator Frank Lautenberg introduced a measure to limit congressional travel and ban so-called "charity .vents." So~far, the biSl has gone nowhere. How have your colleagues here reacted to your legislation? • Lauteabe.rg: I would say, publicly, support is really good. Privately, 'Frank, what do you want to: db! this for?'' Wallace: Friday afteraooni, day one. The siz mrmbers of Congress begin arriving,, and right away we see same familiar fae:es. Senator Breaux who is an avid tennis player heads for the courts. So does Mississippi Senator Thad Cochran who's been here four of the past five years., But there''s not just tennis. Oregon Congrsssian Bob Smith is off playing,with a, group of lobbyists and, golf pros. Congressmaa Nick Rahall of West Virginia is also on the Qourse,. Congress is considering several bills affecting the tobacco industry, such as a tax on cigiarettes to help pay for health care reform. But later, Senator Cochran says no one lobbied him on thee trip. Thad Cochran (Mississippi Senator) : 1+iall. I thiarl[ they're trying to, get together a g,roup of ,people who want to participate in an enjoyable event'and at the eame time make contributions to worthy charities. I think that is the purpose aflthe events. Wallace: And you don' t think they' re attracted' to the, fact that you are a U.S. Senator and that you vote on aa number of issues that affect their businesses? Cochran: Well, there are a lot of people .rho ar. called on to vote on these issues, and I''ve never voted on, one,, one way or the other, because I've played tennis. Cliff Douglas (Consultant, Advocacy Institu'te) : There is an inherent conflict of interest in members of Congress being flown to play t.nnis at luxury resorts byy tobacco interests. Waliace: Cliff Douglas is a, consultant for The Advocacy Institute, a non-profit group: that studies thei •ffect of the tobacco indus try' wlobbying and campaign contributions. You,' re not suggesting that a member of ConQress may

JPN 21 ' 94 t?4: 010 FROM VMS-HOUSTON PqGE. 00G1 -5!- be bought for a weekend in the aun, are: you? Douglass Ons tennis trip doesn''t make a bought s.nator. Oa. the other hand, a lot of the.e -trips and the acceptance of a lot of political action cc®ittee money certainly does makw a diffarence,. Wallaces Saturday morning, dsy two. Virginia Conqressman~ Thomas.Blilay ia wearing the war~oaup that sponsors put into hie gift bag. After breakfast in the tennis' tent, North Carolina Congressm,.n Howard Cob1e, another r.gular here, takes to the court. Latar, tha tannis tournament . atops so lawmakers and lobbyists can, havr their pictures taken with the tennia pros. U.S. Tobacco says the weekend costs sponsors two thouaand dollars for .ach lawmaker, more if their wives come along. Bsst. Congresaman CoJ~le seea~nothing wrong'with it. w~hen theaii lobbyists pay for you to s end a w.ak.nd in Florida, do you feel you ow~e thsm`, anyth~ng? Coblet No,. Wallace: You don't feel at all beholden? Coble s go. Wallaces At all obligated? Coble: No. Wallace s Compromised? Cobles I don•t. Now maybe I'm sort of oddball by not feeling, that way. Wallace s Sunday, day three, and the tournament wraps up. . Senator Breaux mak.s it to the finals playing with Mastase. Later, he j1oins Congressman Bliley and Senator Cochran in their matching .r+.rmup jackets to hand out awarda. And Cochran waen't the only one in his office enjoying the Florida sun.. Senator, you havr a fellow on your staff named Haley pisakerly, is that correct?' Cochrans Wm-hmm. walilace s Do: you know, that when you w.rr playinQ tennia! in Boca Raton, the same weekend your administrativ~e assistant .raa having a good timr in IGey wrst?

JA!W 21 ' 94 1A': 01 FROM VMS-HOUISTO'PJ -6- Cochrans Well, I didn't know it, at the time, or if II knaw it, I'had not thought about it. PAGE . 007 Wallaae: That' s 8aley Fisakerly at the bar wearing sun, Qlasses, Senator Coahzan's twenty-nin.-year-olld adsainis!trative assistant who'  been workinq on; Capitol Hill for three years.. For two days and thrre nights, att a resort in ]C.y W.st, insurance lobbyists hosted mor+e than thirty staffers from somae of the: most powerful committeen in Congress!that vote on matters af'fe!atinQ the insurance industry.. Bquales Now, did we have a discussion of the issuas? Absolutely. Was there some nefarious, underhanded secret handshake? Absolutely not. itJallaces Paul Et?uals, Senior Vice President for the Ihdependent Insurance Agents of' America, says there was nothing, improperabout what aas'called the Congressi Ibeurance Sesainar,.. Nothing nefarious here?' Bqnal s s I don' t ,think so. Wallacer Nothing to hide? Bqaale: Noi. Wallaae s Let nue, ask you a question. Who were the staftere you invited'? Bqualss Oh, I don't have that list at my fingartips. ivallaces. Would you give us the names? Bquale: If I'had that list'here, I'd be happy'to Qive: it to you. Wallaces $qual.i, who.helped put on the week.nd, promised to try to got the list, but when, he cheoked with the other c,roups involvedi in the event, the word came back no list was available,. Tbe insurance lobmyists held morning,meetings to disauss,matters of interest, to the indtistryx establishing a natural disaster fund. backed in part by ' federal lman1w so! hurri©an+a, floods, and, earthquakes don' t bankrupt insurance companies ; refora of' Superfund laws, the industry'ss goal is to limit ita liability ia hazardous waste cleanupsp andC health care reform. The industry wants a say in the final outcome..

JAN 21 '94 14:01 FROM VMS-HOUSTON PqGE.00gi -7- This legislation, whsth.r it''s passed' or killed, . could mean hundreds of millions of dollars to the industry. Squala: I'll say it for yow. Clearly. there is a financia.l cioaonponent to most of the legis].atj:.on facing aaybusinessy in the, CionQress', isucluding theinsurancise industry. Wallace: The meetings break up by noon. But the lobbyists have scheduled the rest of the day for socializing. Some~ staffers head.to the beach .rhere they ean charge -their lunch and drinks to lobbyists who sit with them enjoying the sun. Others head for Che golf course where lobbyists! pay the forty,-nine dollar greens f..s. One night, aooktail parties are held on an ocean-front pier and a rooftop veranda. Another night, there~'s a dinner on, the lawn of' Earry Tsuman's winter White. Hourle. The insurance lobbyists say their weekend trip didn't cosipramise the Conqreesional staf'fersi anymore 1 paying prime T3me' s Sam Dianaldison to speak to an, itasuacaaoie meeting last year canpromised him. And they note, that our industry group, the National Organization of' Broadcasters, does the eame thing, taking metnbers of Congress to play giolf' iu piorid& or see the shown in Las Vegas while at the same time seeking tax breaks and opposing new regulations. Zquales There is a wel'l-k:wwn quote from a bygone era in politics that if you canvt tak. their money, drink their .rhiskey, and eat their food and' thoa vote against them. then you don't belong in this business. Saturday, it's more of'the same:t meetings in the morning, playing in th,e afternoon with the lobbyists . picking up, the tab, which, by the end of the weekend, comes to about a, thousazid dollars per staffu. O'Reillyt Theiyr become the symbol of Santa Claus because... Ilallaces. 1Cathie.n O'Reilly, President of' the National Iiisurazace Consumers Orqanisation, says the l'obtryists axe inve.ting in a relationship with congressieanal staffers whohave tremendous influence on~Capitol Hill. O''Reilly: For a twenty-siz-y,eas-old, often for who this' is their, first majlor job out of Qraduats school, it is pretty heady to suddenly.b., put in a limo a'nd to be catered,to as if you were royalty.

JAN 21 '94i14:02 FROM VMS-HOUSTON PAGE.009: -$_ Wallace: Thwgenerosity oi lobbyists certainly i.n't lost on some mr.mbera of Congress. Congress~ Coble dors not travel of!tea. Does some of your colleagutes abuse this? Do sosvr of your colleagues go on the circuit? coblw:. Oh, I'st surr they do. I know for a fact they do. Wallacr:~ You want to tell us somew of your coZleagues .rho! abuse the privilege? Cob1w: I'd be reluctant to do that. I' could lRaane thea, but I think it would not be proper for me to do that. Wallace: 3enator, do you know how many of t3>stsw eorporata sponsored trips you took?' Breaua I have a record of thw`, sure.. Wallacee In the last five years for which you filed disclosure reports, you have taken fifty-five trips over a hundred and fortlr-nine, days. Senator, you''re one of' the most trequent fliers on Capitol Hill. Breaux: But all of' those trips have m.t .rith, th. rules and r.gulations and tha rulings! of the Sthics! Ccmmitte+t,4 Tbat' s what we are guid.d by. I's not guided! by Chris Wallace. wallaces In the past few years, lobbyists.have paid for Hreaux to go to West Pa1m Beachs Fort lhyersl Hort Walton, Boachl, scottsdiale, Arizona; Palm Bpr ss Las. Vegasr 8an Diego and' San pranciaco. Th.re's no 1 t on ho.. many, trips a member of' Congress can take. You're kind of' on a congressional travel circn3t, aren't you? Breaux: No, that'st nct true at all. Now, yon mentioned the na'ea o~f'nice pla+oes. I'don't select ahers they havwc+onfereacest' they do.. O'Raillys The access is the oxygsri supply of' Wtshingtcn lobbyistw. Wallaces O'Reilly says that consumer groups like hers can*t afford to take members of Congress to llorida. She, says the result is that corporate lobbyists get special accrss, and special influence in the la`ra, that

JnN 21' ' 94 14: 02' F'ROMI UM9'-FHOW5TON11 PAiO'E_ 010 -9- Congress passeA. o,Aeillys The insurance industry would not spend that kind ofl money to talue people to Florida if they did not kno.w from experi.noe that it would' work. Zquale t if you are tryir:,q to b. involved in the public policy process, it certainly helps for people who axe also involved in that process to know who you are, to r.tura your phone, calls, aad to meet with yon.. wallace: And don, t these tri~s give big business, give lobbyists like yourselfo special access? Squale i I don't beliwe so. Hallaces xeanwhile, sme msnb.rs of Congress say, as long as the rules pezmit it, they see.no reason to chanqe. Are you going, tb; be back in Boca Raton next year'P Bt.auxs If they have the errent,I'd like, to. I think it's a good event. Donaldsoni You, should know that about,a year ago, Congressman]ndtew Jacobs f'rosIndians, introduced a bill that would mak. it a federal cr3me--tbribesy--for members of Congress to take trips fund.d by lobbyists. As you might snspect, so far nothin+g' har happened with that bill. But you can be sure that Psimw Tfime .rillstay anthe case. # i 0