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McCain Unveils Plan to Overhaul 527 Groups

Sen. John McCain (R-Ariz.) has unveiled a proposal to limit donations to 527 organizations to $25,000 per person each year, or $50,000 each election cycle, that if enacted could be a huge blow to the groups’ hopes of being a force in the 2006 elections. Those groups raised and spent more than $500 million in the previous cycle, with many of the organizations relying on multimillion-dollar donations from wealthy individuals to fund their activities.

McCain’s initiative was submitted last Thursday as an amendment to the lobbying reform package debated by the Senate and is similar to a 527 proposal offered last year by Reps. Christopher Shays (R-Conn.) and Marty Meehan (D-Mass.). While it was never formally offered by McCain for consideration as part of the Senate’s lobbying reform legislation, the full text of McCain’s amendment was included in the Congressional Record on Friday.

The Senate lobbying reform bill is now stalled thanks to a partisan fight over the Dubai ports controversy, and Majority Leader Bill Frist (R-Tenn.) has not said when he will bring it back to the floor. A Senate GOP leadership aide said the bill is not likely to be revived until after the weeklong St. Patrick’s Day recess that begins on Monday.

If McCain is unable to attach his 527 amendment to the lobbying bill, he will offer it as an amendment to another bill, according to GOP sources close to the issue. Frist and Minority Leader Harry Reid (D-Nev.) will first have to agree on a list of amendments that will be considered under the lobbying reform bill to determine McCain’s next move on his 527 proposal.

In addition to the $50,000 cap on donations, McCain’s proposal also would require 527 organizations to use “hard money” raised under federal campaign limits to pay for certain campaign activities.

McCain also included a provision allowing a speedy judicial review of the proposal if it becomes law and is challenged on constitutional grounds.

House Republicans are also considering whether to attach 527 language to their version of lobbying reform legislation.

Speaker Dennis Hastert (R-Ill.) and other GOP leaders are expected to meet today

to go through their as-yet-unreleased lobbying reform bill on a “line-by-line” basis, according to Republican insiders. If there

is sufficient agreement within the leadership, the proposal will be given to the entire House Republican Conference on Wednesday. Language affecting 527 groups is expected to be included in the House GOP

lobbying reform package, although what

exactly it will entail was unclear at press time.

Reps. Mike Pence (R-Ind.) and Albert Wynn (D-Md.) offered a bill last year to require 527 groups to disclose more information about their activities, and it would also ban foreign nationals from donating to such organizations, a direct shot at financier George Soros, who has pumped millions into liberal 527s. The Pence-Wynn bill, which has been approved by the House Administration Committee, would also lift the aggregate limits on individual donors, repeal the limits on total spending by national parties and allow unlimited money transfers from leadership political action committees to party committees.

Democratic leaders have strongly opposed the Pence-Wynn bill, arguing that it undermines the 2002 Bipartisan Campaign Reform Act. Democrats, however, also have benefitted more from 527 political spending than their GOP counterparts, and Republican claim that fact is the reason the minority party opposes any 527 reform effort.

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