SHOULD CONTRIBUTIONS to a central fund at the Republican or Democratic national committee headquarters be publicly disclosed? Should there be limits on the amount of such contributions? You would not be alone if you thought that these were questions settled long ago, and to general satisfaction. Yet the fact is that the answer is no if the contributions in question qualify as "soft money."

Soft money refers to contributions to state parties that are legal under the laws of the state but would be illegal under federal law. It includes cash contributions, money given directly by corporations and unions, PAC contributions over $5,000 and individual contributions over $1,000. In theory the money is given to dozens of different state parties. In practice the national parties collect the money in large lump sums and then distribute it according to set formulas to state parties. Soft money is not just nickles and dimes. The Republican National Committee this year expects to raise $3.7 million in soft money, 9 percent of its total, and the Democratic National Committee hopes to collect some $1.4 million, 17 percent of its much smaller total.

And yet there is no requirement of disclosure at the federal level. That means you can give $100,000 to a party's soft money fund, and all that is reported are the driblets of money allocated in states that require disclosure at the state level. The Republicans will volunteer the names of some of their soft money contributors; the Democrats keep mum. The system breathes of the bad old days: unlimited contributions with minimal disclosure. The parties and the politicians know whom they have to thank for their $100,000 contributions. Only the public is left in the dark.

The Federal Elections Commission has made the first moves to change this disgraceful situation. Its hearings Wednesday left no doubt about the scope -- and growth potential -- of the problem. It also left little doubt about what should be done. Contributions that are centrally collected and centrally disbursed to the various states should be centrally reported. Regulations, moreover, can ensure that when soft money is used for the benefit of federal candidates, it should be so reported; the commission should not indulge the fiction that part of the sum is intended for the nominee for county drain commissioner. Framing precise regulations is within the competence of the commission. The FEC has winked at this loophole as it has gotten larger. It should plug it now.