In Boost for Democrats, FEC Rejects Proposed Limits on Small Donors

"The Commission has failed to close a loophole that dangerously undermines the purpose of the federal campaign finance laws," Sens. John McCain (R-Ariz.) and Russell Feingold (D-Wis.) said in a joint statement. "As a result, a flood of soft money will enter the system which will violate the letter and the spirit of the law."

Ed Gillespie, chairman of the Republican National Committee, and Marc Racicot, chairman of the Bush-Cheney campaign, declared that the FEC action "sets the stage for a total meltdown of federal campaign finance regulation in 2004."

The Bush campaign and the RNC have both raised far more money than their Democratic counterparts. The GOP has joined campaign finance watchdog groups to prevent independent, pro-Democratic organizations from collecting soft money.

Conversely, ideological organizations on the right and left praised the FEC. "With today's FEC decision, Progress for America will become even more active than ever," declared Brian McCabe, president of the pro-Bush group. "This is a great victory for the nonprofit community," said Nan Aron, president of the liberal Alliance for Justice.

In 2002, Congress passed the McCain-Feingold bill barring the political parties from raising soft money: unlimited contributions made directly from corporate and union treasuries, and from rich people.

In an attempt to fill the vacuum in Democratic Party finances created by the ban, top operatives, including former Clinton administration aide Harold M. Ickes and former AFL-CIO political director Steve Rosenthal, formed such 527s as the Media Fund and ACT.

These two organizations have already raised and spent more the $42 million, most of it soft money. The money has financed $23 million worth of television ads critical of Bush, and the formation of large-scale voter-mobilization programs in battleground states.

ACT, which has a fundraising goal of $95 million for this election, boasts that it will engineer "the most sophisticated and massive get-out-the-vote operation America has ever seen." According to ACT, it is sending out neighborhood canvassers with hand-held computers in 17 battleground states to "shape the content of future communications with a voter based upon what that voter has told us he cares about the most."

The Media Fund has spent $23 million on anti-Bush ads in battleground states. A recent Media Fund ad declares: "Prescription drug costs are climbing, yet President Bush sided with the drug companies, blocking Medicare from negotiating lower prices and banning Americans from importing low-cost drugs from Canada."