FEC Ordered to Rethink '527' Rules

U.S. District Judge Emmet G. Sullivan has rejected requests by the Bush-Cheney campaign and by two advocates of campaign finance legislation to order the Federal Election Commission to impose tough regulations on "527" political committees that put more than $400 million into the 2004 elections.

Instead, in a ruling issued late Wednesday evening, the judge gave the FEC a choice: Either explain in detail why regulations are not needed or begin proceedings to develop such rules.

In the 2003-04 election cycle, 527 committees active in federal elections raised $424 million, according to the Campaign Finance Institute. Pro-Democratic groups spent $314.4 million and pro-Republican groups spent $84.1 million.

The judge warned that if the FEC continues to treat 527 committee complaints on a case-by-case basis instead of issuing encompassing rules, it will have to explain how the interests of complainants will be protected under time-consuming processes that often do not produce any action until the election is over.

"Cases arising from the 2004 campaign have languished on the Commission's enforcement docket for as long as 23 months, with no end in sight, even as the 2006 election campaign has begun," Sullivan wrote. "The FEC can take years to complete an administrative action, and penalties, if they come at all, come long after the money has been spent and the election decided."

Two of the plaintiffs, Reps. Christopher Shays (R-Conn.) and Martin T. Meehan (D-Mass.), the House sponsors of the 2002 McCain-Feingold campaign finance law, interpreted Sullivan's order as a victory.

"Judge Sullivan supported our belief that the FEC's failure to bring 527s under campaign finance law was a dereliction of its duty by rejecting the FEC's justification for refusing to issue regulations. This was a crucial step in bringing fairness to our campaign finance laws," Shays said.

Sullivan's decision means the FEC must once again tackle the tough issue of the independent political committees, which were used in 2003-04 to get around legislation banning the use of large donations from unions, corporations and rich people -- also known as "soft money."

In May 2004, the FEC rejected regulation of 527s by a 4 to 2 vote. Three members have since been replaced -- Scott Thomas, who voted for regulation, and Bradley Smith and Danny L. McDonald, who voted against it.

It is not clear how the new commissioners are likely to vote.

Commission Chairman Michael E. Toner, who supported regulation, said the commission will take up the issue soon.