By Guy Gugliotta
Washington Post Staff Writer
Saturday, September 21, 1996; Page A01

In the spring of 1995, Sen. Larry Pressler (R-S.D.) took a trip to five western cities and Chicago to collect information and campaign contributions from the telecommunications industry.

As the new chairman of the Commerce, Science and Transportation Committee, Pressler was a prime mover in Congress's efforts to overhaul telecommunications. Stakes in the telecom bill were enormous, affecting telephone and computer companies, movies and television and high-tech firms of every description.

In his minority party years, Pressler had been all but ignored by the industry. Indeed, from 1984 to 1993, telecommunications industry political action committees (PACs) gave him only $110,400, the least of any commerce committee member, according to the public interest lobbying group Common Cause.

But now he is chairman. On his western trip Pressler gave speeches, schmoozed with executives, visited plants and talked about his legislation. He also held at least six fund-raisers for his 1996 reelection campaign, most of them with telecommunications leaders.

Pressler's ability to wrest campaign money from the industry he is supposed to regulate is hardly unique. Despite periodic feints toward campaign finance reform, Congress continues to use a set of laws and regulations permissive enough so that any lawmaker -- especially a senior incumbent -- can parlay his official position into campaign cash.

Pressler said in a brief interview this week that his office scrupulously obeys the finance laws and has retained "a law firm and an accounting firm" to help navigate any hazards. "We follow all the rules really carefully," he said.

But that's not the point, said Ellen Miller, executive director of the nonpartisan Center for Responsive Politics, which studies election law. "It's not a question of what's illegal, but of what's legal and sanctified by practice," she said. "It is systemic abuse by both parties at all levels of candidates. In campaign finance, everybody is running red lights."

A Washington Post review of this year's Senate races showed that incumbents on June 30 had $31.3 million in campaign cash on hand, while challengers had $10.8 million, about one-third as much. Sen. Phil Gramm (R-Tex.) led all Senate incumbents, with $3.6 million. Massachusetts Gov. William F. Weld (R) was the leading challenger, with $3.4 million, but the next highest challenger, Democrat Harvey Gantt of North Carolina, ranked 17th overall, with $947,648.

In PAC money, the disparity was even greater. Federal Election Commission figures showed incumbents by June 30 had outraised challengers $12.7 million to $2.4 million, a factor of more than five. The top 10 PAC recipients were incumbents.

No one used the system better than Pressler, 54, South Dakota's three-term senior senator, who is facing a tough reelection race. In cash on hand, he stood eighth among 20 incumbent candidates, with $1.76 million, but everyone ahead of him is from a state with at least four times South Dakota's 730,000 population. Pressler's opponent, Rep. Tim Johnson (D), had $499,849 in the bank.

In PAC money Pressler was without peer. By the end of 1995, according to Common Cause, Pressler had collected $107,985 from telecom PACs, tops in the Senate. And by June 30, his $1.1 million in overall PAC contributions led everyone in Congress -- Senate or House. Johnson was the leading recipient of PAC money among challengers, with $515,700.

By law, candidates must comply with a vague blend of Senate and House rules, FEC guidelines and federal statutes. Using published records -- especially those of the FEC -- it is relatively easy to identify who contributed to a campaign and how much.

But the manner in which money was obtained -- whether through fund-raisers, direct mail solicitations, unsolicited contributions or phone calls by either the candidate or professional fund-raisers -- is difficult and sometimes impossible to ascertain.

Under federal law, no congressional employee can solicit or receive a campaign contribution in a federal building, a measure that bars Capitol Hill lawmakers from conducting fund-raising activities in congressional offices.

To cope with this restriction, lawmakers open political offices to coordinate campaign activities, hire full- or part-time campaign staff, or detach their congressional staff to do campaigning.

FEC records show that Pressler did none of these things. Until November 1995, he had no campaign headquarters, no campaign staff and, according to his office, no paid professional fund-raisers. Nevertheless, FEC records show that Pressler raised $1,017,342 in the first half of 1995. His only out-of-pocket staff expense, FEC records show, was $1,339.08 paid to three people, all full-time Pressler Senate office employees working for the campaign in their spare time.

Pressler campaign manager Karen Dvorak explained in a letter that "as to fund-raising, Senator Pressler has many supporters who raise money for him and engage in all kinds of political activities in both South Dakota and throughout the nation. Volunteer steering committees and others have been utilized."

As a member of the minority party, Pressler had often bragged about his mediocre fund-raising ability and advocated campaign finance reform. He said this week he still he finds fund-raising "very painful," and "cannot defend the system." But, he added, "it is the system we have, and I follow the rules as they are."

And under the current system, noted Pressler lawyer Ben Ginsberg, "It is a fact of life that people who are in the majority and chairman of the commerce committee . . . are likely to have a fairly easy time raising funds."

The GOP took over the Senate in January 1995, and Pressler became chairman of the committee charged with writing the telecommunications bill. That month, the industry publication Broadcasting & Cable reported Pressler "leaning heavily" on telecom executives for financial support and described a $1,000-a-plate fund-raiser attended by 200 industry lobbyists "only weeks" after the election.

On April 7, 1995, Pressler flew from Washington to Sioux Falls, S.D., the first stop on a 17-day trip that would also take him to Las Vegas, San Diego, Los Angeles, San Jose, Calif., Denver, Chicago and Peoria, Ill.

FEC records for Pressler show that he received perhaps $32,000 from individuals in the western cities he visited, among them telecom executives from Walt Disney Co., Ameritech, Sony Pictures, Fox TV, MGM and QWest Communications.

Phone calls to some of the contributors confirmed that Pressler attended fund-raisers in the cities, and Pressler's office produced a travel schedule that set aside time for "campaign events." Pressler was not required by law to describe the events, and there is no clear indication who sponsored an event, who paid for it or how much it cost.

The trip was a "mixture between office and campaign," Ginsberg said, a distinction critical in both congressional record-keeping and in ensuring the accuracy of FEC reports.

Law recognizes that officeholders live three lives: public official, private citizen, and political candidate. Congressional rules and FEC guidelines do not allow commingling of the funds lawmakers use to finance their separate roles.

Thus, a senator cannot use campaign funds to pay his mortgage, buy himself a week at a health spa or pay salaries to his office staff. In the same fashion, the senator may not use his office account to cater a fund-raiser, call contributors, launder shirts or pay a staff member to send out begging letters.

To abuse these rules risks prosecution under federal statutes. Making false statements to the government, either on FEC reports or in periodic accounts filed with the Secretary of the Senate, carries a fine and up to five years in prison. Breaking the rules would also earn colleagues' disapproval, anything from a nasty letter to expulsion from the Senate.

A trip like Pressler's in April 1995 shows how official and campaign business can overlap. The law does not prevent an officeholder from conducting official business and fund-raisers in the same town, on the same day and with the same people, as long as the activities are paid for from different accounts.

Difficulties arise, however, over travel costs, hotels and other expenses that cover both official and campaign activities. "You use common sense," said one retired senator who asked not to be named. "In my view you couldn't go down to Miami for two hours of official business, spend two days and bill the office."

Senate records show that Pressler spent $4,132.99 in public funds during the April trip. This sum paid for three days of constituent business in South Dakota, a speech in Las Vegas before the National Association of Broadcasters, official business meetings with telecom executives in San Jose and Denver and a plant visit in Peoria.

In the same period, Pressler's campaign spent $4,372.88, according to FEC records interpreted by Ginsberg. FEC records do not always require breakdowns of expenses event by event. Ginsberg said these entries referred to particular campaign expenses of the April trip.

Pressler's records show that the commerce committee paid $505 for his April 9 flight from Sioux Falls to Las Vegas, and for one day's hotel stay while he spoke to the broadcasters. Pressler stayed two more days in Las Vegas and held two fund-raisers, one of them a luncheon at the Barbary Coast resort, attended by gaming industry executives and local business people.

Meetings like this one, after which Pressler picked up at least $7,000 in individual contributions, according to FEC records, are the bedrock of campaign fund-raising, short visits with strangers put together wherever a senator happens to be.

"They always try to piggyback on something," said Las Vegas contractor Tito Tiberti, who gave $1,000 to Pressler after the Barbary Coast luncheon. "Most of these guys come here for a few hours, then leave, but I think he [Pressler] flew out here for something else [the broadcasters' convention]."

For the next few days, ending Easter Sunday, Pressler was in Los Angeles and San Diego for visits paid for by the campaign, according to FEC records interpreted by Ginsberg. These included two fund-raisers in Los Angeles, a lab visit and unspecified "campaign meetings" in San Diego.

It was the April 13 cocktail party at the Paramount Pictures Commissary in Hollywood that produced a flier listing Ted Turner and Rupert Murdoch among media and entertainment industry co-sponsors. " . . . Senator Pressler plays a unique role in setting the broadcasting, cable television, telephone and other telecommunications policies that will shape America's communications infrastructure into the next century," the flier said.

Admission cost $500, the flier advised, and "checks should be made payable to `Friends of Larry Pressler,' " Pressler's campaign account. Walt Disney Co. chairman Michael Eisner gave $1,000. Eisner, Turner and Murdoch, who held a New York fund-raiser for Pressler later in the year, all had a fundamental interest in the telecom bill.

From San Diego, Pressler flew to San Jose for meetings with computer executives, then to Denver, where he made two plant visits, lunched with telecommunications executives and held two fund-raisers. Pressler's records show that Senate funds paid $522 in air fare. The campaign picked up the hotel and catering costs, according to FEC records interpreted by Ginsberg.

The Denver fund-raisers, like the luncheon and the other official events, were attended predominantly by telecommunications executives, many of them from QWest Communications, most of whom contributed $1,000 apiece.

"My interest was his involvement in telecommunications legislation," said QWest executive Peter Geddes, who contributed $1,000 after an April 19 luncheon at a Denver restaurant. "I wanted to tell him my views, for whatever they were worth."

Pressler said he designed his 1995 trips primarily to win support for the telecom bill from industry companies. He said he had little to do with the fund-raisers. "Very seldom did I take the initiative," he said. "I've built up a cadre of supporters, and everything was pulled together without any initiative from me."

In Chicago the next day -- funded by the campaign, Ginsberg said -- Pressler met with telephone company executives to talk about the telecom bill over lunch, then attended a fund-raising dinner. The PAC of the regional telephone company, Ameritech, gave Pressler $3,000 two days before the visit.

"There were about 30 to 40 people there," said retiree Robert Mazer, who contributed $1,000 to Pressler at the April 20 dinner at which Ameritech and United Air Lines executives spoke. "We're friends of Larry Pressler, and we wanted to do whatever we could to contribute."

Staff writer Helen Dewar contributed to this report.