Panel Backs Bill To Rein In '527' Advocacy Groups
Donations to PACs, Candidates, Political Parties Would Increase

By Thomas B. Edsall
Washington Post Staff Writer
Thursday, April 28, 2005

The Senate rules committee approved legislation yesterday to prohibit "527" organizations such as Swift Vets and POWs for Truth and the Media Fund from using unlimited contributions to run political commercials.

The measure immediately provoked a firestorm of criticism from left and right advocacy groups -- and from top Senate Democrats, who called the bill a Republican "Trojan horse" designed to benefit the GOP while weakening financial support of Democrats.

The legislation, which may go to the Senate floor next month, would prohibit 527 advocacy organizations buying television time in federal elections from accepting unlimited contributions. If the bill becomes law, for example, financier George Soros, who gave more than $6 million to the Media Fund in 2003-2004, and developer Bob J. Perry, who gave the Swift boat group $4.5 million, would be allowed to give no more than $32,500 to such groups.

Other major provisions include:

· A ban on federal campaign finance regulation of political activities on the Internet, including the political Web logs that have become increasingly significant players in elections.

· An increase from $5,000 to $7,500 in maximum contributions to political action committees. The amount that PACS could give to candidates would rise from $5,000 to $7,500, and the amount they could give to political parties would jump from $15,000 to $25,000.

· Allowing trade association and corporate PACs to solicit employees, including non-supervisory workers.

Fred Wertheimer, president of Democracy 21 and a leading proponent of setting restrictions on 527 groups, which are named after a section of the tax code, said the amendments adopted yesterday "seriously undermine the effort to close the soft-money loophole for 527 groups which resulted in hundreds of millions of dollars in unlimited soft money being spent to influence the 2004 federal elections."

During committee proceedings, one of the lead sponsors, Sen. Charles E. Schumer (D-N.Y.), withdrew his support for the bill, warning Democratic colleagues that "this bill is serving as an anti-campaign-finance Trojan horse" that GOP leaders will use to gain partisan advantage.

Later, Senate Democratic leader Harry M. Reid (Nev.) declared: "The illegitimate process that brings this fatally flawed bill to the Senate floor should make it clear to supporters of McCain-Feingold that Republicans see this bill as an opportunity to subvert that reform legislation to their partisan benefit, not as an opportunity to advance reform."

But Sen. John McCain (R-Ariz.), who sponsored the 2002 McCain-Feingold campaign finance law, charged that Schumer's claim of a Trojan horse is a "transparent fig leaf for his flip-flop and cave-in to special interests, which is not surprising."

"You have to recognize there are some people you can trust around here," he continued. "Most of them you can. Some of them, you can't." McCain said any amendments to weaken the bill will be removed during Senate floor debate, and he declared that he and other sponsors "would not permit" a partisan bill to pass.

Schumer responded, "I understand that John McCain is upset, but he should be focusing his attention on Republican efforts to kill this bill, not my efforts to try to make the bill better by encouraging voter participation."

Senate Rules and Administration Committee Chairman Trent Lott (R-Miss.), a bill sponsor, said the purpose of the measure is to restrict the uncontrolled spending in campaigns by 527 groups that in the last election cycle totaled $585.2 million, according to PoliticalMoneyLine.

"My goal was to get a bill, and we got a bill," Lott said after the session.

Schumer and other Democrats contend that Republicans are using legislation originally intended to regulate 527 groups to create a partisan Republican measure. They say it would do so by making it easier for pro-GOP corporate and trade association PACs to raise and spend money.

In many respects, the Democratic attacks were echoed by members of the self-described campaign finance "reform community," and by liberal and conservative advocacy groups. The advocacy groups, known under the tax code as 501(c)(3) and (c)(4) organizations, are worried that courts or federal regulators would extend the 527 rules to cover them, threatening their ability to publicly comment on proposals before Congress and the White House.

"The essential thing the bill would do is remove one of the few remaining vehicles citizens have to praise and critique public officials," said James Bopp Jr., a conservative critic of campaign finance law.

Cecile Richards, president of America Votes, which coordinated much of the pro-Democratic 527 activity last year, declared: "It is clear that Republicans who control and are driving -- and abusing -- this process are intent on stifling progressive speech and undermining reforms."

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