Sign up for The Media Today, CJR’s daily newsletter.
By Susan Q. Stranahan
A largely behind-the-scenes lobbying effort is underway that could affect the manner in which campaigns are financed during this election, and many to come. That effort may also have the unintended effect of rocking the non-profit world to its very foundations.
Unfortunately, so far the story of what is at stake has gotten less press coverage than George Bush’s neckties. Even when the issue has slipped onto the media’s radar, the reporting has been confusing, conflicting — and incomplete.
“Almost nobody understands this stuff,” wrote David Tell in the March 8 issue of The Weekly Standard. (Tell is the exception, and his 6,000-word article offers a detailed history. Even that, however, skips over some critical aspects of the current debate.)
Herewith, Campaign Desk leaps into the breach.
At issue is the question of how, or if, the federal government should regulate “soft money” — the millions of dollars pouring into the re-election efforts (primarily of John Kerry, this year) from organizations not bound by rules imposed by the new McCain-Feingold campaign finance legislation. And that’s largely how the media has covered the story.
Most of the media attention thus far has focused almost exclusively on the legality of so-called 527 organizations (independent non-profits named for Section 527 of the tax code). With the 2004 campaign looming on the horizon, leaders from both parties, and wealthy donors, sought a legal means to keep soft money as a player in the outcome, and discovered that independent or third-party organizations, the so-called 527s, could still accept unlimited contributions for “issue” ads or advocacy efforts, such as voter registration.
Two of the most prominent 527s, the Media Fund and America Coming Together (ACT), are heavily funded by billionaire financier George Soros. Both are liberal-leaning and staffed with long-time Democratic activists. (Soros’ Open Society Institute is one of several funders of Campaign Desk.) Last fall, Republicans formed their own 527, called Americans for a Better Country (ABC), and subsequently asked the Federal Election Commission to issue an advisory opinion on the legality of what it — and, by extension, other 527s — were doing.
The FEC recently held two days of hearings on the subject and has received more than 140,000 public comments — a record. Many, according to a survey by Cox News Service, came from Bush supporters who urged stricter regulation of the 527s, fearing that their ad campaigns and mailings may tip the outcome of the election.
Although the FEC has a reputation for lax enforcement (its six members are equally divided between parties), Washington insiders were stunned when the commission’s staff lawyers issued their draft opinion in February that said ABC as a 527 cannot use soft money for any communications promoting the policies of the Bush administration, including ads, voter registration or get-out-the-vote efforts.
Individual FEC commissioners, however, quickly distanced themselves from that recommendation. Vice-chairman Ellen Weintraub, a Democrat, said: “I will not be rushed to make hasty decisions, with far-reaching implications, at the behest of those who see in our hurried action their short-term political gain.” Because it’s unlikely the FEC will take any action prior to November 2, the Republican National Committee wants the matter heard in a different venue. The committee filed a complaint with the FEC, alleging “an unprecedented criminal enterprise designed to impermissibly affect a presidential election,” but also asked that the commission dismiss the complaint so the question can then be put before a federal judge for resolution — presumably before the election.
In their initial response about the legality of the 527s, the FEC lawyers also noted that under a strict interpretation of the law, other non-profits -501(c)(3)’s and 501(c)(4)’s, also named for the section of the tax code that gave birth to them — might be subject to FEC regulation and financial reporting rules if their “major purpose” was to influence federal elections.
The views of the FEC lawyers triggered consternation and scrambling in the advocacy and foundation world — a phenomenon that hasn’t yet caught much press attention. More than 600 organizations created the Coalition to Protect Nonprofit Advocacy. The coalition has argued that “the proposed rules would seriously impair vigorous free speech and advocacy, as well as voter participation now and in the future.” The regulations also could silence organizations that play crucial roles in holding elected officials accountable to the public or that encourage specific positions on bills or regulations, according to some in the nonprofit community. Overnight, under the proposed rule changes, non-partisan groups would become political action committees. As such, they would have to raise “hard money” in small contributions from individuals, a burden that might drive many into bankruptcy, critics have predicted.
Others, however, see the protest as nothing more than a gambit to protect the status quo — at least through this election cycle. Among them are Sens. John McCain (R-Ariz.) and Russell D. Feingold (D-Wis.), the original sponsors of the campaign finance legislation passed in 2002. In a letter to their colleagues, the senators wrote that “the 501(c) issue is simply being used as a cover in an effort to derail the FEC’s review of 527 political activity.” (1 MB PDF) McCain echoed a similar theme in March 2 testimony before the Senate Rules Committee.
“[W]hat the FEC needs to do now is simply enforce existing federal election law …,” McCain testified. “It defies the whole purpose of the FEC to say that it should not enforce this law in the middle of an election year because such enforcement might affect that election.”
So, is the push to get a decision — from the FEC or the courts — merely a subterfuge by those who wish to silence critics of the administration, regardless of the broader impact on nonpartisan groups? Or is the prospect of silencing hundreds of advocacy groups in the course of cracking down on soft money simply a red herring, raised to give the FEC cold feet?
Richard L. Hasen, whose Web site covers this issue closely, says “I think it’s a little of both. … It’s being used by the 527s and the people who support them to drum up any opposition to rulemaking on the fear of [starting down] the slippery slope. If we regulate the 527s now, the 501s are next.”
For those of us Outside the Beltway, the ways of Washington — and the inhabitants who thrive therein — seem like so many cogs and gears, spinning to no avail. Occasionally, however, they mesh and something happens. In this case, that something could be big. And worthy of notice. It would be nice if the campaign press started noticing.
Has America ever needed a media defender more than now? Help us by joining CJR today.
