ONE OF THE most striking -- some would say ominous -- developments of the 2004 campaign was the growth of so-called 527 groups operating outside the usual campaign contribution limits. With political parties barred by the McCain-Feingold campaign finance law from taking huge "soft-money" checks from corporations, labor unions and wealthy individuals, some of this largess migrated to outside groups, many newly formed by party operatives to try to fill the soft-money void. According to a study by the Campaign Finance Institute, such groups (named after the tax code provision that governs their operations) raised $405 million in 2004, up dramatically from the $151 million they collected in 2002.
The rise of these groups -- and the likelihood that they will play an even more influential role in future elections -- represents a cause for concern that some of the previous abuses of the soft money system will replicate themselves. That hasn't happened yet; corporate contributions to 527s, for example, actually declined from $32 million in 2002 to $26 million last year. But as 527s become a more entrenched part of the political system, the risk grows that contributions will be spurred by the hope of buying influence among politicians who will take note -- or so some donors may hope -- of big checks to allied groups.
Moreover, the sheer size of the checks flowing to 527s is unsettling in a system in which contributions to other political committees are strictly limited. In the 2004 campaign, 24 donors gave $2 million or more, a list topped by Democratic financiers George Soros ($24 million) and Peter Lewis ($22 million.) Texas builder Bob Perry gave $8 million to the Republican-leaning groups Progress for America and Swift Boat Veterans for Truth. Such mammoth checks can't be eliminated from the political system; the Supreme Court has said that individuals have a First Amendment right to make unlimited independent expenditures on behalf of favored candidates. But if big givers want to join with others in an effort to influence federal elections, it's reasonable (and, we believe, constitutional) to ask that they abide by the same limits as other donors.
All of which leads to the question of whether new legislation to rein in the 527s is warranted. Our answer is a cautious yes -- yes because of the concerns expressed above, cautious because of the delicate constitutional considerations involved. The current, two-tier system, in which some groups that want to influence federal elections are limited to $5,000 contributions while others with similar goals scoop up seven- and eight-figure checks, makes no sense. At the same time, it's important that any new law be carefully crafted to avoid infringing on the activities of groups aimed at discussing issues or influencing state or local elections.
A measure being offered by the sponsors of the 2002 campaign finance law seeks to achieve that balance. It covers only 527s (which acknowledge that their purpose is to influence elections), not issue-oriented groups, and it excludes those focused exclusively on state and local elections. There are complicated questions about how to treat state and local groups whose get-out-the-vote activity also affects federal elections, and some fine-tuning may be needed. But the proposal, which could be taken up by the Senate this spring, represents a reasonable, justified approach.