Shays Faults FEC for Campaign Finance Loophole
By Brian Dolan
WASHINGTON—Rep. Christopher Shays, R-4th, said Tuesday that the campaign finance law that he spearheaded is positively affecting races this year but that the Federal Elections Commission needs to enforce it better.
“We are pretty happy with the way campaign finance reform is going,” Shays said in an interview. “You don’t see candidates taking unlimited funds and big checks from lobbyists.”
Nonparty organizations called “527s,” however, may be the loophole that Shays and co-sponsor Rep. Martin Meehan, D-Mass., did not foresee when they introduced campaign finance reform legislation that eliminated unlimited “soft” money contributions to political parties. Congress passed the bill in 2002, making this the first election year it is being implemented.
A 527 is a group, organized under the 527 tax code, that advocates political issues and even advertises for or against candidates, said Steven Weiss, a spokesman for the Center for Responsive Politics, an independent organization that monitors campaign money. Now that big-money donors no longer can finance the Democratic or Republican parties through large and unrestricted soft money contributions, many have shifted their resources to 527s.
Although most 527s existed before the new law did, Weiss said, “there are new groups whose sole issue seems to be to elect or defeat certain candidates….
“These groups are now funding the same activities that political parties used their soft money for in the past,” Weiss said. “Issue advocacy that stops short of saying ‘vote for this candidate,’ but is clearly trying to influence a particular election, is a good example of this.”
Most 527s try to influence federal elections through voter mobilization efforts and so-called issue ads that tout or criticize a candidate’s record, Weiss said. The organizations do not report to the Federal Elections Commission but must divulge their contributors and expenditures to the Internal Revenue Service, unless they already file identical information at the state or local level.
“We do have a problem with the 527s,” Shays said. “If 527s raise money that is used in a campaign, then that money should be treated as campaign money. FEC should step in here big time—they are the ones who introduced soft money in the first place.”
The FEC will decide Thursday whether to take up the issue of political organizations and campaign finance, said spokesman George Smaragdis. Commissioners could choose to redefine “political action committee,” which would help determine whether 527s fall under the restrictions of the campaign-finance law.
Campaign-finance reform, which President Bush initially opposed but eventually enacted, actually has worked to the Republicans’ advantage. Republicans traditionally have raised significantly more money than Democrats from small donors who contribute “hard” money – up to $2,000 per candidate per election. Democrats relied more heavily on now-illegal soft money.
As a result, Democratic supporters have turned their attention to 527s. Democratic and liberal 527s raised nearly $36 million during the past year, according to the Center for Responsive Politics. By contrast, Republican and conservative 527s raised $4.2 million.
Shays also said the federal government does not provide enough money to presidential candidates. The system, established during post-Watergate reforms in 1976, gives candidates $45 million if they adhere to certain spending limits. This year, both Bush and Sen. John Kerry, the Democratic frontrunner, have opted out of the system, a decision that will allow them to spend millions of dollars more.
“I don’t blame President Bush for opting out [of the public campaign finance system],” Shays said. “Or the Democrats, particularly, for not accepting the $45 million,” he said.
“If you have a realistic amount and someone says they have to go over that amount—someone would have to argue getting $75 million for free is not worth it.”
“If someone wants to bypass it then they’d have to work for it.”
