Another Moment of Truth for the FEC
Another Moment of Truth for the FEC
– A Report from Washington by Democracy 21 President Fred Wertheimer –
This week, on May 13, the Federal Election Commission (FEC) is scheduled to consider a proposal by two of its Commissioners that would put the brakes on "527 political organizations" that are circumventing the federal campaign finance laws by injecting millions of dollars of soft money into the 2004 presidential election.
The bipartisan proposal to be offered by FEC Commissioners Scott Thomas, a Democrat, and Michael Toner, a Republican, is designed to correct past misinterpretations by the FEC of the longstanding Federal Election Campaign Act (FECA). The Supreme Court made clear in its recent McConnell decision that the FEC had been wrongly interpreting the law.
Properly administering and enforcing campaign finance laws is what the FEC is supposed to be all about. Unfortunately, the past track record of the FEC is one of a failed agency that facilitates rather than prevents circumvention of the campaign finance laws. This week the FEC will have yet another chance to protect rather than undermine the campaign finance laws it is supposed to enforce by adopting the Thomas-Toner proposal.
The two key campaign finance problems addressed by the Commissioners’ proposal are the manipulation by 527 groups of the FEC’s "allocation rules" in order to spend almost exclusively soft money on partisan voter mobilization activities to influence federal elections, and the use of soft money by 527 groups to finance ads that attack or promote federal candidates.
The Thomas-Toner proposal effectively addresses both of these problems by correcting the FEC’s past misinterpretations of the FECA. Furthermore, it is designed to cover only 527 groups, thereby eliminating the controversy that arose over the inclusion of 501(c) groups in earlier draft FEC regulations.
The Commission’s current fundamentally flawed allocation rules lead to absurd results in how they regulate 527 groups spending soft money for partisan voter mobilization activities to influence federal elections. (The FEC’s allocation rules determine how much federally legal hard money and how much soft money must be used by non-party political groups, like 527 groups, when they make expenditures that affect both federal and state elections, such as expenditures to mobilize and turn out voters in a federal election year.)
America Coming Together (ACT), for instance, has made clear its overriding purpose is to defeat President Bush. Yet ACT claims that under existing FEC allocation rules it can spend 98 percent soft money on its partisan voter mobilization activities in 17 presidential battleground states.
This result is indefensible and a complete fiction. It means that ACT is treating 98 percent of its expenditures as being made, in effect, to influence state and local elections and only 2 percent to influence federal elections, despite the fact that everyone knows, and ACT has made clear, its expenditures are being made to defeat President Bush.
In the McConnell decision, the Court found that the FEC’s allocation rules for political parties had "subverted" and "invited widespread circumvention" of the FECA and "permitted more than Congress, in enacting FECA, had ever intended."
The existing FEC allocation rules for non-party political groups, including 527 groups, are far worse.
The Thomas-Toner proposal requires the use of a minimum of 50 percent in federally permissible funds, i.e., hard money, to pay for partisan voter mobilization activities that influence federal elections. Thus, any voter drive by a 527 group, such as ACT, would have to be funded with at least 50 percent, not 2 percent, hard money. This would have the effect of substantially limiting the amount of soft money a 527 group could spend on these activities.
While this may not turn out to be the long term solution to this problem, adoption of this proposal by the FEC is essential to protecting the integrity of the campaign finance laws in the 2004 federal elections.
The other key issue addressed by the Thomas-Toner proposal is the use by 527 groups of soft money to fund multi-million dollar TV ad campaigns promoting and attacking federal candidates in the 2004 elections. The best known example of this is The Media Fund, which has been spending millions of dollars in presidential battleground states to run ads explicitly attacking President Bush or promoting Senator Kerry.
These groups claim they are entitled to the tax status provided by section 527 of the tax code as groups that are "organized and operated primarily" to influence elections. Yet they also claim they do not have to comply with federal campaign finance laws because their ads do not contain "express advocacy."
Thus, the 527 groups claim a right to be treated as political groups for purposes of section 527 of the tax code, but at the same time the right to be free from the federal campaign finance rules and limits that apply to other political groups with the same principal purpose as they have — influencing elections.
This is a plain circumvention of the law.
The Thomas-Toner proposal addresses this issue by deeming any organization operating as a political group under section 527 of the tax code to have a "major purpose" to influence federal elections, unless the group falls within specified exemptions that cover organizations that operate solely to influence non-federal elections or the selection of appointed officials.
Under federal campaign finance laws, any entity that has such a "major purpose" and also spends more than $1,000 on communications to influence a federal election must comply with federal campaign finance laws, regardless of whether the communications contains "express advocacy."
This proposal would plainly cover The Media Fund and similar groups, and require that they register as federal political committees and comply with the federal campaign finance limits that apply to such committees.
The Thomas-Toner proposal incorporates the Supreme Court’s view in the McConnell case that the express advocacy test is not applicable to communications made by political groups that are in the business of influencing elections. It would correct the FEC’s past misinterpretations of the FECA concerning the express advocacy test and the requirements for registering as a federal political committee.
The bipartisan Thomas-Toner proposal is about ensuring proper compliance with existing, longstanding law and not about "sowing uncertainty during an election year," as FEC Vice-Chair Ellen Weintraub recently said in opposition to any rulemaking on activities by 527 groups.
The FEC cannot justify continuing to wrongly interpret the campaign finance laws, as the Supreme Court has made clear it has been doing, on the grounds that the agency wants to wait until the 2004 elections are over before it starts properly interpreting the laws.
The issue here for the FEC and the country is clear: Does the FEC have the will to function as a real enforcement agency, or will the FEC again abdicate its statutory mandate to enforce the nation’s campaign finance laws, as it has repeatedly done in the past?
Capital Bits & Pieces, Vol. IV, No. 21 | Released: Monday, May 10, 2004
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