Undisclosed soft money to pay for GOP perks; 21 on Hill seek change

Introduction

WASHINGTON, July 28, 2000 — At the Republican National Convention in Philadelphia, cars and drivers will be provided for all attending Republican members of Congress, along with 24-hour concierge service, staffed with 50 workers at the ready, according to news reports.

These perks would be paid for by “soft-money” contributions to the leadership political action committee created by House Majority Whip Tom DeLay, R-Texas. His six-year-old Americans for a Republican Majority reportedly plans to spend $1 million on the convention — without ever disclosing the donors or how the money is spent.

Such undisclosed leadership PAC soft money is the focus of an effort by 21 members of Congress, who are urging the Internal Revenue Service to interpret a new campaign finance law in a way that would force leadership PACs to disclose their activities. The July 25 letter from 21 senators and representatives, led by Sens. Joseph Lieberman, D-Conn., and John McCain, R-Ariz., specifically addresses such leadership PACs as those backed by DeLay, House Majority Leader Dick Armey, R-Texas, and House Republican Conference Chairman J.C. Watts, R-Okla. Armey and Watts are using their leadership PACs in similar ways to finance convention activities, according to news reports. None of the PACs reports the money it collects in “soft money” contributions.

Legislation signed into law July 1 requires disclosure of all contributions and expenditures of political organizations engaging in election-related activity, when the groups organize under Section 527 of the Internal Revenue Code.

The congressional letter points to news reports that certain leadership PACs intend to not report their unlimited and undisclosed soft-money contributions under the new law. They urge Internal Revenue Service Commissioner Charles C. Rossotti to interpret the act to include leadership PACs, which are political funds controlled by incumbents to benefit the party and other candidates. According to the Congress members letter, all such expenditures must be disclosed monthly to the IRS, along with a list of all contributors.

“Interpreting the statute to allow a PAC to continue to hide from public view all of its soft money activity simply because it reports other, hard money activity to the FEC [Federal Election Commission] would not only be at odds with Congressional intent; it would threaten to swallow the law whole,” the letter said.

Bill Shapard, Watts spokesman, told the Center for Public Integrity that, in effect, he agrees with the letter. “Congressman Watts has said from the beginning that he is willing to disclose, so long as it is bilateral, so both sides are participating. He has never had a problem with disclosure.” DeLay’s office and the Americans for a Republican Majority could not be reached for comment on the letter.