ATTACK OF THE KILLER D'AMATO

By ERIC POOLEY

"It's a round world," says a calm, philosophical Alfonse D'Amato, "and every thing comes back. So treat people the way you want to be treated." The New York Senator is performing for a journalist in his Washington office. He's playing the New D'Amato--the same gracious character who has been seen on TV running the Senate Whitewater hearings and promoting a new autobiography. This is the persona designed to dim the memory of the Old Al, a cunning machine politician who was rebuked by the Senate Ethics Committee in 1991 after a dozen influence-peddling scandals had thoroughly soiled his name. "Be generous and fair," the New D'Amato says in conclusion, "not malevolent and meanspirited."

Then the phone rings, and the Old Al is back. "Philly!" he barks at Philip Smith, his finance director at the National Republican Senatorial Committee, where D'Amato is in charge of recruiting, promoting and bankrolling Senate candidates nationwide. Smith isn't up to speed on a project. "Get with it!" D'Amato roars. "Get with the program! No! Get your brain in synch." He tries to restrain himself, but it's hard. He cracks the whip about fund raising--"I'm not happy! Speed it up!"--then checks on an event. "How much we gonna gross? Hell, you gotta do better! Fifty percent of that? All right. It's better than a stick in the eye." He hangs up, looking fully alive. He can't keep the Old Al down.

Ask a Senator from either side of the aisle to name the reigning king of Washington's money game--the lawmaker who symbolizes what most people can't stand about the process--and Al D'Amato will get the nod. His new prominence derives from his simultaneous hold on three top positions: chairman of the Senate Banking Committee, head of Bob Dole's presidential steering committee and chief of the G.O.P. organization that raises money for Senate candidates. Those responsibilities give him fund-raising clout that is unrivaled--and, many critics say, unsavory--and make him one of the most powerful politicians in Washington. This week three of his Senate colleagues plan to challenge D'Amato's power, but the odds are against them. He is a bare-knuckle player even by the raucous standards of Capitol Hill, a club fighter who lives for the ring. He curses and cajoles, bestowing favors and exacting revenge, cutting his endless, beloved deals: a compromise to push through a bill, an infusion of cash for an ally's campaign, a raise for someone else's staff member--anything to prove his power and display his reach.

The trouble begins when those deal-maker roles overlap--when D'Amato collects money from those who stand to gain from his legislation. As chairman of the Senate Banking Committee, he has been pushing the interests of the major banks and brokerages that have poured at least $1.5 million into his campaigns over the years. He has already won passage of a bill that makes it harder for investors to sue fraudulent brokers. (His closest aide, Michael Kinsella, is a former lobbyist for the Securities Industry Association and an active fund raiser.) And he is pushing ahead with the most sweeping bank-deregulation package in history, the repeal of the 1933 Glass-Steagall Act, which forbids mergers between banks and securities firms. D'Amato's reform would throw open the doors to mergers between banks and companies from nonfinancial industries as well. Critics say that could lead to bank failures and federal bailouts. But the bill won't come to a vote this year. Some banking lobbyists believe this is because the promise of deregulation is such a powerful motivator for giving. Says one: "Al wants to milk it."

It is standard practice for lawmakers from both parties to raise money from industries they regulate. What sets D'Amato apart is his job as chairman of the National Republican Senatorial Committee, which plans to raise and spend $65 million during this election cycle to help extend Republican dominance of Congress into the next century. A not-unthinkable gain of six seats in the Senate next year would give D'Amato's party a filibuster-proof, 60-vote majority--and the kind of steamroller momentum that Newt Gingrich enjoys in the House.

Only once in the past 20 years has the head of the Senate unit also been chairman of a major legislative committee. So far this year, D'Amato has leveraged his Banking Committee power to raise $14 million for Senate candidates and open the wallets of Wall Street for Bob Dole, who calls him "the man who won't take yes for an answer." Common Cause president Ann McBride doesn't share Dole's sense of humor on the subject. "When the Banking chairman comes calling as the party's chief fund raiser," she says, "and comes on in a particularly aggressive way, it isn't a scandal waiting to happen. It's a scandal right now."

Lobbyists have charged for years that D'Amato and his staff use crude and even threatening fund-raising tactics, drawing explicit links between contributions and pending legislation in a way that's prohibited by federal law. The charges, first leveled in a 1986 Wall Street Journal article, persist today. Two lobbyists, who insist on anonymity because they fear losing access to D'Amato, have told TIME that D'Amato staff members solicited contributions from them this year during conversations about pending legislation. "It's raw; it's distasteful," one of the lobbyists says. "Al's guys reach through the phone and say, 'We're helping you, and you have to help us.'" In a recent survey of Washington lobbyists, Knight-Ridder Newspapers reported that three lobbyists complained that D'Amato sought contributions from them while they had legislative business on his desk. One of the lobbyists told Knight-Ridder that a D'Amato aide called him after a meeting with the Senator to ask how it had gone. When the lobbyist said his client's business was still pending, the aide reportedly re plied, "Well, we haven't seen a contribution from them." The client sent a $5,000 check, according to the lobbyist, and the business went through.

D'Amato's style has become the model for a new generation of in-your-face congressional fund raisers. "He links money to legislation like nobody else in town," says Donald Foley, executive director of the Democratic Senatorial Campaign Com mittee. "He tells donors they'd better not be giving to Democrats. And his attitude is spreading among Republicans." A lobbyist told TIME that a D'Amato aide tried to persuade one of the lobbyist's clients to fire him because he had given money to an opponent of D'Amato's. Even some Republican Senators express concern about D'Amato's tactics. One of them compares D'Amato-raised money to "country sausage: you're hungry for it, but you don't want to know how it was made."

Calling the allegations "absolute hogwash" in an interview with TIME, D'Amato denied any wrongdoing. "I do not twist arms," he said. "I have never twisted arms. Given the number of people that we meet, the fact that there are political axes to grind, that kind of thing will be said from time to time. But there is no linkage."

Some lobbyists say D'Amato needn't twist their arms because they freely give the maximum allowable in order to ensure that they'll get in his door. "He commands respect and demands response," says Alan Greenstein, president of the New York State Association of Realtors. "I have access to his office--I call him Al. But I've never felt there was a quid pro quo. Not long ago, I saw him about an issue and told him my views. He told me I was nuts."

D'Amato has a famously loyal network of moneymen, some of whom are willing to deliver threats on his behalf. Last winter New Jersey Governor Christine Todd Whitman, who was being mentioned as a possible Republican vice-presidential candidate, clashed with D'Amato and his protege, New York Governor George Pataki, over their bid to nominate a political ally as head of the Port Authority of New York and New Jersey. Pataki announced the choice without consulting Whitman, whose staff then spread word that the nomination was dead. But in mid-January a G.O.P. fund raiser with ties to both camps phoned a top Whitman aide. "Here's what's going to happen," the fund raiser said. "Al's going to call Christie. He'll remind her that he's the kingmaker--she needs his help to get on the ticket. If she blocks this deal, she can forget about it." Whitman changed her mind and backed the nominee. She denies that the threat forced her turnabout. And D'Amato denies being behind the threat.

"I am not a bully," he told TIME. "I can't help it if people use my name in that manner, but I don't operate that way. Have I made recommendations? Yes! And if people accept them, fine!" He gestured at a reporter's notebook. "Say I bristled when you brought that up."

The biannual race for chairman of the G.O.P. Senate campaign tends to be a hot contest. In 1992 Phil Gramm won it over Mitch McConnell by just one vote. Last December D'Amato won unanimously. He had declared his candidacy a year before the post was open, calling every Republican in the Senate and asking each of them to consider one test of his worth. "I guarantee you I'll take an unknown and beat Mario Cuomo," he said. "If I do it, I want your vote."

The New York Governor seemed invincible to people outside the state, but D'Amato, de facto boss of New York's G.O.P., saw his weakness. With state chairman William Powers, a former aide, D'Amato had been raising money and backing winners in key local races, spreading his influence. Using this new power base, D'Amato chose Pataki, a demographically suited but little-known state senator, and rode him to victory over Cuomo. At the same time, during the fall of 1994, D'Amato raised $750,000 for Senate Republicans, giving the party a taste of what he could do. A month after the 1994 election, he won his own race .

D'Amato has been all over television this summer, but his best work is done out of the media glare: raising money at a rate of 25 calls an hour, brokering deals where he can. "Al's got the juice--he decides whether an incumbent gets $50,000 or $200,000 from the fund," says Democrat Lawrence O'Donnell, a former top aide to New York's Daniel Patrick Moynihan." There's no limit to his ambition or energy. Some Senators want nights and weekends free, but he has no other life. He wants to sleep in hotel rooms, sit up all night making calls and exercise power."

While D'Amato and his Senate campaign staff of 100 operatives target a dozen crucial races around the country, Republican hopefuls from those states travel to Washington to kiss the chairman's ring--then leak the story back home to lend themselves credibility. D'Amato loves it. "I can't select candidates," he says. "But I can counsel. I can encourage. I also tell them the ground rules: If they develop a following and raise funds, then we will help."

D'Amato's committee has 78 times as much cash on hand as its Democratic counterpart. By Election Day 1996, the three-term Senator will have funneled a total of $12 million to Senate can didates and $7 million to state committees--so-called hard money, capped by federal election law. He will have spent an additional $45 million on overhead and political operations from controversial soft-money contributions--huge, hard-to-track donations, not limited by law, that are used for polling, TV spots, get-out-the-vote drives and other activities ostensibly unrelated to a specific candidate. "D'Amato is concentrating on soft money, which packs the biggest potential for abuse," says McBride of Common Cause, which is studying soft-money donations to the committee. It found that 50 financial-services firms--mostly banks and brokerages with a keen interest in D'Amato's deregulation plans--have already ponied up a total of $600,000 in hard and soft money. BankAmerica gave the maximum $15,000 political-action-committee contribution, then kicked in $26,000 more in soft money. PaineWebber came through with $50,000. D'Amato has hired a former Federal Election Commission compliance expert, Craig Engle, to "make sure we do things the right way."

He is the master of the game, but the rules of engagement are being challenged. This week Republicans John McCain of Arizona and Fred Thompson of Tennessee and Democrat Russ Feingold of Wisconsin will introduce the first bipartisan campaign-finance-reform bill in a decade. The package would cap campaign spending, abolish political-action committees and soft money, and provide incumbents and challengers with free and discounted television time. Cutting the cost of campaigning, McCain says, would "level the playing field and slow up the money chase."

McCain knows that he faces an uphill climb. Campaign-reform bills have passed both houses in each of the past five Congresses only to die behind the scenes. Because ruling parties raise more money than minority parties, those with the power to reform the system have no immediate incentive to do so. Still, this is a hopeful moment. McCain expects support from a dozen Republican Senators--including six of the party's 11 freshmen, led by Thompson of Tennessee. If they come through, McCain says, he'll be able to force a floor vote. He paints the issue in terms of party integrity. "Ninety percent of the American people say special interests play too great a role in government," he says, "but here we Republicans are milking the special interests. Why do you think Congress's approval rating is dropping?" Adds McCain: "I've got to voice respect for Senator D'Amato. He plays the game as it exists. He is the perfect campaign-committee chairman for the current system."

McCain's bill will probably be opposed by the majority leadership and by players like D'Amato, who has fought every finance reform of the past decade. D'Amato's position is understandable, since fund raising is the engine of his career (his campaigns have raised $25 million in the past decade). With chronically low home-state approval--his favorable rating is 34%--he'll need to spend some $12 million in 1998 to win re-election; McCain's bill would cap him at $7 million. As Senate-campaign chairman, D'Amato knows the G.O.P. majority is enjoying a historic surge of corporate giving. To limit that now, says Thomas Mann, a Brookings Institution congressional expert, "must seem like unilateral disarmament to Al."

D'Amato's fund-raising muscle and party control in delegate-rich New York are especially helpful to Bob Dole, a longtime ally who values D'Amato's direct, undeferential style. Last winter D'Amato put his machinery in gear for Dole, lining up endorsements from virtually every Republican official in New York--a full year before the March 7 primary, the earliest big-state contest of 1996. D'Amato can use New York's arcane ballot-access laws to toss primary opponents off the ballot, a tactic he called "a stain on the party" back when he didn't control the party. He is not complaining now, and neither is Dole. "Al is a great weapon to have on your side," says Dole senior adviser Donald Devine.

But others, including campaign manager Scott Reed, fear he is a weapon that could explode in Dole's face. After he delivered his state party to Dole, D'Amato was pushing for a role larger than steering-committee chairman--but then he performed his famously offensive public impersonation of Judge Lance Ito and killed his chances. The cautious Dole campaign decided he was the kind of supporter that the candidate wanted on his side but not at his side. In fact, D'Amato may have hit a glass ceiling. His ethical baggage and impulsive style preclude a serious bid for majority leader, and he probably wouldn't survive the confirmation hearings that would stand between him and a spot in a Dole Cabinet. Which leaves him where he is: Senator, moneyman, boss.

D'Amato's devotion to Dole has caused the Kansan problems in the past. During Dole's 1988 presidential bid, Eduardo Lopez Ballori, a developer eager to curry favor with D'Amato, funneled $75,000 in illegal contributions to the D'Amato and Dole campaigns. (Ballori got $58 million in D'Amato-steered HUD subsidies.) Last April an executive at the Brooklyn company that makes Sweet'n Low sugar substitute was indicted for making illegal contributions of $58,000 to D'Amato and $10,000 to Dole in hopes of staving off a congressional ban on saccharin. (D'Amato fought the ban.) Neither campaign knew that the contributions were illegal, and it would take a much bigger scandal to ruffle Dole's feathers now. Democrats are dreaming it will happen, but Dole and his advisers don't appear concerned. D'Amato, for his part, promises to "keep on doing what I'm doing." The system may not serve the public, but it serves Al D'Amato very nicely.