Congress sifts competing measures on campaign finance reform

Introduction

WASHINGTON, June 27, 2000 — On June 8, the Senate passed an amendment by Senator John McCain, R-Ariz., that would force currently invisible political groups to disclose their identities and their sources of funding. Congress is trying to decide which measure will best accomplish that.

Here is a comparison of the most promising legislation on campaign finance disclosure and on the “invisible” groups formed under Section 527 of the Internal Revenue Code.

These groups take advantage of unlimited contributions from any source to directly affect elections without having to disclose the groups identity, contributor information or expenditures.

McCain has long worked for campaign-finance reform, but an incident during his campaign for the Republican presidential campaign this year prompted his latest effort, one of the only campaign finance measures to pass the Senate in more than 20 years.

An innocuous sounding group, the Republicans for Clean Air, spent $2.5 million to blast McCain’s environmental record as he campaigned in New York and California. The people behind the group were exposed only after its two funders revealed that they were the “Republicans” for clean air.

The House struggle

On June 9, a day after the McCain amendment passed, the House voted down a similar amendment from Representative Lloyd Doggett, D-Texas. Some House members found Doggett’s amendment too broad; for others, it wasn’t broad enough.

After the House vote, the Republican leadership promised a vote on campaign finance reform before the Independence Day recess. Leaders also announced that a Republican campaign finance bill would be drafted by Representative Amo Houghton, R-N.Y., and Ways and Means Committee Chairman Bill Archer, R-Texas.

The bill was set to be voted on in the House Rules Committee on June 27, but the vote was postponed indefinitely.

Republican Representatives Christopher Shays of Connecticut and Michael Castle of Delaware are teaming with Democrat Martin Meehan of Massachusetts to promote disclosure requirements that encompass more than the 527 groups. These House members would include all organizations that run electioneering advertisements within 90 days of a general election and within 60 days of a primary. All 527 groups that spend more than $10,000 annually on election advertisements would be required to disclose their donors.

One reason for Republicans seeking greater disclosure from a variety of politically active groups is that, at this point, legislation on 527s would affect Republicans more than Democrats. Republicans J.C. Watts, R-Okla., and Tom DeLay, R-Texas, are both closely tied to 527 organizations active in this election season. Watts group, Securing American Families Everyday, conducts research to assist Republicans in their campaign messages. DeLays group, the Republican Majority Issues Committee, touted a fund-raising goal of $25 million to be raised in $3 million chunks, and has run advertisements targeting Representative Michael Forbes, D-N.Y., who switched parties last year.

The Republicans argue that by focusing only on the new 527 groups, political activity by labor unions, trial lawyers, business associations and other interest groups would be ignored and not disclosed. The current controversy on Capitol Hill is about how broadly disclosure can be required before it impinges on what courts have ruled to be constitutionally protected speech.

While some bills propose to force disclosure of all donors to any group that sponsors political ads, the Supreme Court has suggested that such disclosure might be unconstitutional. “We must not in haste overreach and pass a bill that is destined to be immediately struck down by the Court,” McCain told an oversight subcommittee of the House Ways and Means Committee on June 20.

The Senate up to bat

Senate leaders long opposed to campaign finance reform have come up with their own proposals. Senators Mitch McConnell, R-Ky., and Majority Leader Trent Lott, R-Miss., have co-sponsored a bill by Senator Gordon Smith, R-Ore., that would include labor unions and business groups in political activity covered by the McCain amendment.

McConnell, a longtime opponent of campaign finance reform, wrote June 14 in USA Today that current efforts to rein in Section 527 groups is “folly unless the disclosure regime is extended to other tax-exempt groups engaging in political activity. Otherwise, those committees simply will reconstitute in another form and continue their activities, unabated and undisclosed.”

This point was recently raised in hearings by a House Ways and Means Subcommittee on Oversight. Committee members asked academic experts, tax specialists and federal election lawyers about the possibility of groups changing their tax status and reconstituting themselves in a new form to continue their political activity. These experts assured the committee that that was a real possibility.

Responses from the campaign field

The leading presidential contenders havent said much about this specific issue of campaign finance. The staff of Texas Governor George W. Bush told the Center for Public Integrity that Bush is for full disclosure, though he hasnt supported any particular legislation. On the day the House voted down Doggetts amendment, Bush told the news media in Connecticut that, “the idea of letting everybody who was a contributor to these groups that are advertising for or against candidates it would be nice to know who they are.” Gores campaign did not return the Centers calls, but his website and his own campaign finance disclosure proposal reflect his support for a disclosure policy.