House Approves 527 Reform

April 5 , 2006

WASHINGTON, DC - Congressman David Dreier (R-San Dimas,CA), Chairman of the House Rules Committee, led debate on the floor of the House today on the first major part of his lobbying reform legislation. Dreier voted to approve the 527 Reform Act of 2006, H.R. 513, which was approved with bipartisan support. It was originally included in the Lobbying Accountability and Transparency Act of 2006, H.R. 4975.

"The lobbying reform effort is in full swing in the House, as today’s vote demonstrates," Dreier said. "The goal of lobbying and ethics reform is to enhance accountability and transparency of those who seek to influence the Congress. This bill will achieve that goal for 527 groups, and the larger campaign finance system."

527 groups, named after a section of the tax code, raise and spend unlimited and virtually unregulated sums of money on political activities. Under the IRS code, a 527 group is defined as an organization "organized and operated primarily" to influence elections. The Bipartisan Campaign Finance Reform Act of 2002 (BCRA) sought to eliminate unregulated money in political campaigns. The legislation approved today would require 527s to file with the FEC as political committees and comply with federal campaign finance rules, unless they raise and spend money exclusively in connection with non-Federal candidate elections, or state or local ballot initiatives, or the nomination or confirmation of individuals to non-elected offices, such as judicial positions. Dreier said the point of this legislation was to require 527s engaged in federal political activity to comply with the same rules as other political groups under BCRA.

"While I opposed BCRA 2 years ago, I accept that it is the law of the land, and I believe as legislators, we have an obligation to examine whether laws are working as they were intended. Clearly, BCRA is not. If there is going to regulation of federal political activity, those restrictions should apply to everyone engaged in it. This legislation is in response to a loophole that was predicted when BCRA was passed, without my vote. If more reform is necessary in the future, we should address it when the time comes."