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Bill Would Curb '527' Spending

No Action Expected Before Elections

By Helen Dewar
Washington Post Staff Writer
Thursday, September 23, 2004; Page A27

Sponsors of the nation's latest campaign finance law, outraged over the millions of dollars being spent by independent "527" organizations on this fall's elections, joined forces again yesterday to propose legislation barring the groups from raising and spending unlimited sums on federal campaigns.

No legislative action is anticipated to curb the groups' activities before the Nov. 2 elections, meaning the legislation would have no effect on organizations such as the Media Fund and Swift Boat Veterans for Truth, which have been running ads attacking President Bush and his Democratic challenger, John F. Kerry, respectively.

But the bill's drafters -- Sens. John McCain (R-Ariz.) and Russell Feingold (D-Wis.) and Reps. Christopher Shays (R-Conn.) and Martin T. Meehan (D-Mass.) -- said they will wage an intensive effort next year to pass the legislation.

"We're confident of passage," McCain said at a Capitol Hill news conference.

Without the new legislation, there will be an "explosion" in the number of 527 groups raising unregulated sums and running attack ads against candidates in future elections, McCain said. Feingold predicted the situation would "explode into scandals" unless it was addressed promptly and effectively.

Meanwhile, Citizens for Responsibility and Ethics in Washington (CREW) filed a complaint with the Federal Election Commission challenging the activities of a new 527 organization -- the November Fund -- which is working to defeat the Democratic presidential ticket. CREW contends that the November Fund is a "political committee" under FEC law and that it must comply with FEC contribution limits and reporting requirements.

As introduced in the House and the Senate, the McCain-Feingold-Shays-Meehan bill would require 527 groups -- named for the section of the tax code that covers them -- to register as political committees with the FEC if their main purpose is to influence federal campaigns.

As such, they would be barred from using unlimited "soft money" contributions from corporations, unions and wealthy individuals to finance electioneering ads and required to rely instead on "hard money" contributions, which are limited by law, to pay for the ads.

Groups would be exempt if they raised less than $25,000 a year or were involved only in non-federal elections.

Under the campaign finance legislation that Congress passed in 2002, political parties and federal candidates were barred from raising or spending soft money. The four lawmakers contend that the 527 groups fall under the same constraints but argue that the FEC has not followed the law in writing rules to implement it. Instead, the commission came up with "absurd half-measures" that allow the 527s to continue to raise and spend huge sums of money, Meehan said.

Introduction of the 527 legislation came less than a week after a federal judge struck down 15 of 19 individual FEC rules to carry out the McCain-Feingold law, saying the regulations created "an immense loophole" that undermined the purpose of the law.

In addition, Shays and Meehan, with the support of McCain and Feingold, have filed a separate federal lawsuit to force the FEC to crack down on the 527 groups.

"Sometimes it seems a little bit like our mission in life is to clean up the mess that the FEC has made," Feingold said.

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