WASHINGTON — “Punxsutawney Phil came out this morning and saw his shadow,” Senator Trent Lott declared February 2. He wasn’t forecasting more winter, but explaining his support for the 527 Reform Act: “I saw a lot of shadow in these 527s.” The bill’s opponents say it chases shadows rather than real corruption, and they’re ready to fight it.
Senator John McCain and his allies successfully argued that soft money (unregulated contributions) could corrupt the politicians or parties. With soft money banned, what problem would the 527 Reform Act address? The legislation would require political organizations under section 527 of the IRS code to register with the Federal Election Commission. This would subject them to the same limits as non-profit organizations regulated under the Bipartisan Campaign Reform Act of 2002 (BCRA), the highlights of which are personal contribution limits and a ban on campaign speech near elections.
The Washington Post’s March 31 “Curtailing Big Checks” editorial captured the new reform agenda. These 527s are “a cause for concern….The risk grows that contributions will be spurred by the hope of buying influence among politicians who will take note … of big checks to allied groups.” Even without examples of “big checks” corrupting candidates, the size of big checks is “unsettling.”
Not exactly a slam-dunk indictment. Senate Rules Committee chairman and 527 Reform co-sponsor Sen. Lott also regards 527s with a degree of paranoia. He told the Biloxi Sun-Herald, “Instead of going to the parties, rich people are putting money into these 527s in the dark of night.” Yet in 2004, parties received unprecedented political donations.
Despite spending over $400 million last year, 527s bought more noise than political support. Harold Ickes’s Media Fund spent $59 million and Americans Coming Together $135 million and their candidate still handily lost. Why? Ickes blamed the prohibitions against coordinating with the campaigns as insurmountable obstacles. The only 527 that made substantial waves, the Swift Boat Veterans for Truth, spent a relatively paltry $28 million. In fact, their $600,000 initial ad buy had the most impact. Big money didn’t stick nearly as well as a strong message.
Why this new legislation? Trent Lott wants a playing field and money system that again favor the parties. By 2008, over a billion dollars could pour into attack ads by “shadowy 527s … setting the agenda,” he said at the March 8 Rules Committee hearing. The agenda should be controlled by “candidates and the political parties they represent.”
Robert F. Bauer, chair of law firm Perkins Coies’s Political Law Group, told the committee that an emerging “reform industry” best explains the 527 Reform Act. After receiving $140 million in the last 10 years, the reform industry was emboldened by McConnell v. FEC’s green light for the regulation of election speech. The new bill doesn’t merely fix BCRA, Bauer argued. The reformers knew BCRA only limited 527s and didn’t require their FEC registration. BCRA was “one stage in a multi-stage program… by a standing reform establishment.” No longer claiming to pursue corruption, Bauer explained, the reformers now argue “that the influence of money on elections should be contained, from whichever direction this influence is exerted.”
The 527 Reform Act is an extension of BCRA’s monopoly on free speech. The 2002 law prevented citizens’ free association for the purposes of commenting on federal elections. That 527s enabled such expression is unacceptable to the reformers. Lott’s comments on March 8 would support this theory: “I don’t claim that this legislation is the panacea for the 527 problem — but it’s a good start.”
With Lott’s — and President Bush’s — support, the 527 Reform Bill appears a done deal. But a House bipartisan group plans to mount a challenge. Rep. Albert Wynn (D-Md.) and Rep. Mike Pence (R-Ind.) have introduced the 527 Fairness Act, which proposes freeing parties and other non-profits rather than restricting only 527s. It would remove national party spending limits and the individual aggregate spending limit. That way, one person could give up to $2,000 to every group without choosing between parties and independent groups.
“Where’s the corruption if I’m an individual citizen and I want to give a thousand dollars to every single Republican candidate?” a conservative House staffer said Tuesday. “Our answer is always more freedom, more sunshine.” Those backing the Fairness Act had little problem with 527s last year, the staffer said, but “you can’t fight something with nothing.”
Will these legislative renegades succeed? They like their chances for a hearing or even a vote in Rep. Bob Ney’s (R-Ohio) House Administration Committee. Ney’s communications director, Brian Walsh, said that while Ney hasn’t committed to either bill, he has planned a general hearing “within two to three weeks” on all 527 reform.
The reformers may be surprised in the House. Contacted Tuesday, Lott communications director Susan Irby was unaware of the 527 Fairness Act.
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