Opinion Editorials
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PAYING FOR CAMPAIGNS: MCCAIN EYES NEXT TARGET
November 4, 2004
The elections of 2004 proved the success of the McCain-Feingold Bipartisan Campaign Reform Act while highlighting a new problem within the system that still needs to be addressed.
The 2002 bill I sponsored with Sen. Russ Feingold, D-Wis., has worked well to achieve its most important objective. It was primarily designed to eliminate the corrupt influence that corporations, labor unions and wealthy individuals had on our government through their large soft-money contributions.
Today, soft money is illegal in federal campaigns. No longer can a president, senator, member of Congress or head of a national party solicit huge sums of unregulated money for a federal campaign. Before McCain-Feingold, corporate and labor-union donors forked over six- and seven-figure soft-money contributions to gain access to and buy influence over officeholders -- or perhaps worse -- to avoid legislative reprisals from them.
Further evidence of the act's success is the significant reduction of sham "issue ads." In the mid-1990s, corporations and labor unions began evading laws that banned the use of their treasury funds for federal elections by using those funds to pay for campaign ads that attacked and promoted federal candidates and were disguised as "issue ads." The act shut down this circumvention of the law by requiring corporations and labor unions to use PAC money, raised voluntarily from individuals, and not their treasury funds, to run ads referring to federal candidates.
For years, the opponents of reform predicted that the act would result in the destruction of political parties. In fact, the national political parties raised more hard money (direct, limited contributions to campaigns) in the 2004 election cycle than they raised in hard and soft money combined in 2000. The political parties are thriving under this system. This new grassroots emphasis, particularly successful in Internet fundraising, has led to record numbers of new small donors and a broadening of each party's financial base.
While McCain-Feingold ended the soft-money game, a new problem has emerged in the form of tax-exempt 527 groups, named for a section of the tax code for a category of non-profit political organizations. Political operatives in both parties created new 527 groups to circumvent campaign finance laws and continue to inject soft money into federal elections. The 527 groups illegally raised and spent tens of millions of dollars in soft money on ads and partisan voter-mobilization efforts to influence the presidential election.
At the core of the financing for these groups was a relatively small number of very wealthy individuals making large soft-money contributions. Four individuals alone gave a combined total of $78 million to these groups. Our law was not designed to lower spending in elections because the reality is that it costs money to communicate political views. It was, however, designed to ensure that the money political groups spend in federal elections is limited to reasonable, small contributions from individuals to prevent corruption and the appearance of corruption.
This new problem is not because of any deficiencies in McCain-Feingold. The loophole for 527 groups was created solely by the Federal Election Commission (FEC), which is responsible for enforcing the nation's campaign finance laws.
Federal laws and U.S. Supreme Court decisions established that a 527 group whose "major purpose" is to influence federal elections must register as a federal political committee and comply with contribution limits. The FEC refused to take action to rein in these rogue 527s. In response, Reps. Christopher Shays, R-Conn., and Marty Meehan, D-Mass., filed a lawsuit against the FEC for failing to force these 527s to comply with federal campaign finance laws.
In addition, Feingold and I joined the congressmen in introducing legislation to require 527s to register as political committees and to comply with existing contribution limits.
It is clear that the FEC is a failed agency with overtly partisan commissioners who oppose both new and longstanding campaign finance statutes. The FEC has proved its ineffectiveness and its willingness to run roughshod over the will of the Congress, the Supreme Court, the American people and the Constitution. In January, the new Congress will convene, and we will initiate a new round of necessary reforms -- beginning with a new enforcement agency to replace the FEC.
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