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FEC Likely to Fine Several 527 Groups

Just in time for the 2008 presidential campaign season and roughly two years after the agency began scrutinizing a handful of 527 organizations, the Federal Election Commission is likely to hand down significant fines in the near future against groups such as America Coming Together and Swift Boat Veterans for Truth, according to campaign finance lawyers and other experts.

Agency officials and outsiders directly involved in the cases declined to discuss specifics of the investigations, citing confidentiality agreements and prohibitions against discussing ongoing enforcement matters. Still, many familiar with the cases’ issues, including the top lawyer for Sen. John Kerry’s (D-Mass.) 2004 campaign and a former commission chairman, suggested that a variety of factors point to the likelihood that the agency will soon “sock it” to 527 organizations that violated campaign finance laws, particularly those involved in the 2004 presidential cycle.

“They don’t have a lot of choice,” said Marc Elias, a Democratic campaign finance lawyer who worked for the Kerry campaign. “It’s been two years that they’ve had these cases and they have indicated publicly that the enforcement process is the way” the agency prefers to police 527 groups.

While agency officials were unable to indicate the status of ongoing investigations, they were able to confirm a number of organizations when asked about specific groups that complaints had been filed against, perhaps narrowing the field of potential cases that may be closed out in the weeks to come. Among those cited as being the subject of complaints were Texans for Truth, Progress for America Voter Fund, Leadership Forum, the Media Fund, the Joint Victory Campaign, Economic Freedom Fund and Majority Action.

Bradley Smith, a former commission chairman and now a professor at Capital University Law School, said it was unlikely the agency would drag its feet for such a long time unless it had strong reason to suspect campaign finance violations. And, coupled with the FEC’s “general philosophy ... to focus on meaningful penalties for serious violators,” the commission would not devote such time and resources if they did not anticipate reeling in some big fish.

“The commission is [not] trying to have long investigations into meaningless cases,” Smith said. “And these cases will be big time — I think you’ll see pretty big fines come out of them.”

Smith and Elias agree that an ongoing court battle between the agency and Reps. Christopher Shays (R-Conn.) and Marty Meehan (D-Mass.) also contributed to the likelihood that the agency will move soon on the 527 organization enforcement cases.

Shays and Meehan filed a complaint in U.S. District Court in September 2004 alleging that the agency failed to issue “legally sufficient regulations” defining political committees, especially those operating under Section 527 of the tax code. Almost exactly two years later, the lawmakers again petitioned the court and requested that it compel the FEC to explain why it should enforce campaign finance law involving 527 groups on a case-by-case basis, rather than creating a new set of rules.

The Shays-Meehan case is ongoing, but some have suggested that the FEC could bolster its case for the status quo by coming down hard on one or more 527s before its next court date, which is slated for Feb. 1, 2007.

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