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Are new campaign finance regulations an attack on free speech?

Recently there has been an uproar from liberal nonprofit organizations over possible new Federal Election Committee (FEC) rules that would regulate some organizations' efforts to air anti-Bush ads during this election year. The regulations are aimed at independent political committees--section 527 groups.

Republicans see this as a chance to shut off one source of Democratic campaign funds and thereby improve Republican chances for victory in November--and Democrats are aggressively challenging the proposed rules for the same reason.

Those in the campaign finance reform community see this as a rare opportunity to gain the cooperation of the party in power to bring about greater scrutiny and control of election money flow. If unchecked, the existing loophole would continue to give the wealthy a louder voice during the election cycle, and render our democratic process one where the average American is disregarded in favor of wealthy special interests.

Paradoxically, many progressive organizations which traditionally support small "d" democracy and campaign finance reform are asking the FEC to scrap or postpone the proposed rules. Humanist allies including People for the American Way, the Alliance for Justice, and the Sierra Club have all issued statements against the proposed rules. Potentially misleading alerts have circulated from these and other organizations that suggest the FEC is trying to ban all nonprofits from criticizing Bush and members of Congress.

Both sides of this debate agree that the primary target of these new rules is actually 527 organizations like the liberal MoveOn.org and the conservative Club for Growth, not 501(c)3s like the American Humanist Association and Americans United for Separation of Church and State.

People for the American Way accurately defines a 527 as an
 organization that is allowed
 to collect unlimited contributions,
 without disclosing
 donors' names, to run "issue
 ad" campaigns during elections....
 527 groups do not
 have to disclose their identity
 or reveal their activities to
 the IRS or the FEC. Given the
 fact that contributions are
 unlimited, the spending by
 the 527 is far larger than that
 of the PAC [Political Action
 Committee], though specific
 finances are hard to trace.


Contributions to 527s, as opposed to 501(c)3s, are not tax deductible on account of their partisan nature.

The extent of the rules is where the debate starts. These 527s and their allies are saying that the rules will stifle free speech. Alliance for Justice legal council Tim Mooney said in a telephone interview that it "could even ban nonpartisan voter registration activities, and nonprofit research reports that happen to be critical of a candidate." He also suggested that if the FEC tightens the language to specifically exempt 501(c)3s (as they are expected to do), there will be another problem. By defining what 527s do as influencing elections it paints issue ads and other potentially nonpartisan activities as partisan, thereby laying the groundwork for similar rules that specifically limit 501(c)3s down the road.

But Larry Noble, executive director of the Center for Responsive Politics, said in a telephone interview that such fears are unwarranted, and that "there's no proof of a slippery slope being created" The FEC's interest in specifically curbing 527s in order to protect the interests of the average voter is not intended to be a burden on 501(c)3s.

A close read of the FEC rules supports Nobles assertions. The bulk of the FEC rules apply only to "political committees," which they define as groups "the major purpose of which is the nomination or election of a candidate." (See the FEC document yourself at http://www.fec.gov/pdf/nprm/ political_comm_status/04-5290.pdf) Since 501(c)3 status involves an absolute prohibition on such activities, this automatically excludes organizations with that classification from the rule--assuming they are operating within existing law.

Fred Wertheimer, president of Democracy 21, takes an objective approach, saying in a telephone interview that "501(c) groups have some legitimate concerns." He explained that the "FEC rulemaking includes some provisions that affect 501(c) groups, which is wrong and over broad." But Wertheimer said such provisions won't withstand court review because they overstep the FEC's authority, and groups trying to block any action on needed restrictions on 527s are overstepping. He added:
 This stance moves the groups
 organizing the 501(c) efforts
 beyond the very legitimate
 goal of protecting the free
 speech rights of 501(c)
 groups to the very inappropriate
 goal of giving section
 527 groups immunity from
 complying with the nation's
 campaign finance laws.


In an April 2, 2004 letter sent to their congressional colleagues, Senators John McCain (Republican, Arizona) and Russ Feingold (Democrat, Wisconsin) referred to the 501(c) campaign against any FEC rulemaking as a "campaign of misinformation," writing:
 We are greatly concerned
 that the 501(c) issue is simply
 being used as cover in an
 effort to derail the FEC's
 review of 527 political activity.
 Many of those who are
 raising an alarm about the
 effect of the FEC's rulemaking
 on 501(c) nonprofit
 organizations would like you
 to believe that the only way
 to prevent the restrictions
 they fear is for the FEC to
 take no action at all. This
 would be a serious mistake.
 We continue to believe that
 the FEC should address
 the activities of 527 groups
 this election year on an expedited
 basis.


If the FEC implements a tightened version of these rules, it won't silence groups. Rather, it will force them to play by the rules. Instead of accepting multimillion-dollar contributions to elect the candidate of their choice they'd be limited to accepting $5,000 per individual. They'd also have to report their activities instead of keeping them veiled under secrecy. This is a good thing.

So then, why would those organizations known for exposing dirty politics and concealed truths overstate reality on this issue? Well, the strategy of overemphasizing the dangers of the new FEC rules maybe an effective way of criticizing Bush and preserving money to defeat him in the form of 527 electoral workhorses.

Unfortunately, such a Machiavellian technique is not only ethically questionable but it may result in unintended consequences. Noble says that groups crying wolf over this rule "are motivated by political interest," but this political interest isn't very farsighted. If 527s aren't stopped now, the Republicans will be sure to catch on to them by the next election and use them better than the Democrats ever hoped to, since it's no new revelation that the Republican Party has more deep-pocketed supporters than the Democrats.

Modern elections are often decided by donations from wealthy corporations and individuals, funneled in various ways into advertisements and other highly targeted partisan activities. Campaign finance reform advocates believe such expenditures should be tracked and regulated in order to work toward fair elections where every vote really does count and where the voices of the rich don't drown out those citizens of more modest means.

The FEC measure explicitly challenges the money laundering by which funds are directed into 527s by people and corporations seeking to influence elections without abiding by legal disclosure and quantity limits. The FEC is expected to finalize the rules in May, but this will only happen if lobby groups don't manage to convince the department to postpone or scrap the plans. Delaying the decision on the 527 election loophole to a future year is counter to reform efforts, since there's no guarantee that the political powers that be will again be ready to allow such progress.

Roy Speckhardt is director of membership and programs for the American Humanist Association.
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Title Annotation:Up front: news and opinion from independent minds
Author:Speckhardt, Roy
Publication:The Humanist
Date:May 1, 2004
Words:1256
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