Campaign Financing

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Where There’s a Will, There’s a Way: Soft Money Seeps to Campaigns

In December 2003, The Supreme Court upheld the Bipartisan Campaign Reform Act (BCRA), a decision that painted the new campaign finance laws as forceful and significant.

But dozens of political organizations are trying to squirm through loopholes in the laws, tearing at the fabric of the Reform Act.

For fear that campaign finance reforms will be weakened, watchdog groups have filed a complaint with the Federal Election Commission (FEC). The Commission will be investigating possible violations by three political groups: Americans Coming Together, The Media Fund, and The Leadership Forum.

When both sides are cheating, everyone loses

As a result, both Democrats and Republicans are charged with breaking campaign finance laws. Americans Coming Together and the Media Fund are both Democratic organizations, while The Leadership Forum is Republican. All three groups raise and spend millions to promote particular candidates and oppose others.

As to be expected, Americans Coming Together and the Media Fund are doing everything they can to unseat George Bush Jr., while The Leadership Forum is doing the same to re-elect him.

Section 527

The groups who are under investigation - the respondents - have all filed under section 527 of the Internal Revenue Code (IRC), thereby gaining tax-exempt status.

Watchdog groups argue that section 527 organizations are, by IRC definition, political organizations. Therefore, these groups need to file as federal political committees, which are subject to contribution limits.

What are the limits?

The Bipartisan Campaign Reform Act of 2002 is long, complex, and took six years to generate. But its two main provisions are the re-regulation of “soft money," and the ban on corporate, union, and special-interest sponsorship of televised campaign ads known as “issue ads" or “attack ads."

Soft money

The term “soft money" refers to large, unregulated contributions to political parties. Under BCRA, soft money donations are limited to $25,000 a year total. Groups like Americans Coming Together have received much larger contributions than that, but since they are not national political parties, the groups are not necessarily subjected to the $25,000 limit.

Issue ads

As its name suggests, the Media Fund has plans to launch a major ad campaign. The advertisements will counter George Bush and endorse the Democratic presidential nominee.

The Watchdog groups that filed the complaint (Democracy 21, The Center for Responsive Politics, and the Campaign Legal Center) argue that these ad campaigns directly violate BCRA, even though unions and corporations are not paying for the ads directly.

What watchdogs want

The non-profit, non-partisan groups that filed the complaint want the respondents to file detailed fund-raising and spending reports with the FEC. Further, they want the FEC to diligently enforce the laws and police for possible violations and loopholes. The watchdog groups claim that their ultimate goal is to protect democracy from the hyper-influence of special interests and big money, protecting the vote of the average American.

The respondents’ response

The Media Fund, Americans Coming Together, and The Leadership Forum all claim that their fundraising and spending have been legal.

The Federal Election Commission would probably have to adopt new rules in order to explicitly include section 527 groups, defining when spending becomes federal election activity and when donation limits must be enforced. The FEC will hold a hearing in April to decide if further clarification of the laws is needed.

Meat and potatoes

At issue is the permeability of campaign finance law. How diligent does government need to be to ensure that campaign financing is fair and does not severely undermine the voting power of the average American? How can reforms be made comprehensive, so as to protect from corruption, but flexible, so as not to inhibit the political process?

Read more about the Bipartisan Campaign Reform Act. Investigate the Campaign Finance Life Issue. Discuss this topic with other WomenMatter readers in one of our online forums, and when you’re ready, contact your representatives, and let them know what you think.

Article Posted on: 1/21/2004

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