Members Vow Scrutiny After FEC Vote on 527s

Posted May 14, 2004 at 6:28pm

Members of the Federal Election Commission will have to answer to Congress this week about their rationale for not clamping down on unregulated 527 groups that are pouring millions of dollars into the 2004 elections.

House Administration Committee Chairman Bob Ney (R-Ohio), saying that it was important for his panel to “hear directly from the commissioners themselves,” announced that he will hold the watchdog agency’s feet to the fire in an oversight hearing this week. Ney’s announcement came shortly after the FEC decided on Thursday to delay any action on 527 groups for at least 90 days.

“If the FEC decision is giving the green light for these groups to operate, which it certainly appears they are, then I expect both Republican and [Democratic] groups will soon flourish,” Ney said.

As Roll Call reported last week, Senate Rules Committee Chairman Trent Lott (R-Miss.) said he also plans to hold oversight hearings on the FEC, primarily because he was troubled by the agency’s inability to rein in 527 groups.

Rep. John Larson (Conn.), the ranking Democrat on the House Administration Committee, commended Ney’s scheduling of an oversight hearing, noting that he also “want[s] to explore with the chairman the complex issues involved in 527 rulemaking to see if [the] decision by the FEC to delay this rulemaking was warranted.”

“The FEC’s rulemaking process is of particular concern in the wake of the Supreme Court’s decision in McConnell v. FEC, which ruled that outside groups can raise money for get-out-the-vote activities and other voter-education programs under BCRA,” Larson said in a statement. “As we enter another federal election cycle, this hearing will certainly help inform all parties interested in the FEC’s decision making process regarding 527 groups.”

Other lawmakers had harsher words for the FEC.

“I am appalled at today’s irresponsible decision by the FEC to allow soft money groups to spend millions of dollars to influence the outcome of the 2004 elections,” Rep. Adam Putnam (R-Fla.) said in a statement.

Putnam and others have been railing against the activities of certain Democratic-leaning 527 groups such as MoveOn.org, the Media Fund and American Coming Together. The critics contend that these 527s have “devoted themselves to spending millions of dollars for the sole purpose of circumventing existing laws.”

The current phase of the dispute began last Thursday, when FEC commissioners concluded that they needed more time to explore the complexities of the 527 issue before trying to implement new rules in the heat of a campaign cycle. In so doing, they put off calls to immediately regulate 527s and make them subject to the same reporting requirements and fundraising limitations that apply to other political committees.

“I don’t feel the great pressure that everybody thinks we all should feel … but I do feel a fairly serious obligation to try to get it right,” said commissioner Danny McDonald at the FEC’s session last Thursday.

McDonald, a Democrat who has served on the FEC for more than two decades, added that the numerous comments the FEC had received during its hurried rulemaking process raised “substantive issues about Congress’ intent,” and he questioned the assertion by some lawmakers that the new campaign finance law they enacted in 2002 warrants new regulations cracking down on the 527 groups.

Sen. Olympia Snowe (R-Maine), a co-author of the Bipartisan Campaign Reform Act of 2002, last week wrote to the agency’s six commissioners expressing her concern that some groups have “publicly flouted the provisions of the law during the 2004 election cycle.”

“The FEC’s response to this flagrant disregard for federal law has been lackluster at best,” she said.

But McDonald said he was “surprised” by Snowe’s letter and argued that “it does not coincide with what she and her colleagues said on the [Senate] floor” during the Congressional debate over BCRA.

“You can’t present the law one way as an author, then be more concerned once the law is passed,” McDonald remarked.

But FEC watchdog groups who have been closely following the 527 debate said they aren’t prepared to let the FEC off the hook and are in fact exploring new legal tactics to turn up the heat on the agency.

Democracy 21 President Fred Wertheimer said he is exploring the possibility of going to court to press the FEC to deal with pending complaints that Democracy 21 and others have filed against 527 groups such as ACT and the Media Fund. Under federal law, FEC failure to act on a complaint within 120 days allows the complainant to bring such a lawsuit.

Moreover, Wertheimer said he is “looking at filing new complaints” against 527 groups on the basis of additional legal grounds for violations of federal campaign finance laws.

“The commission’s failure to do its job doesn’t turn illegal activities into legal activities,” he said.

In the meantime, some conservatives — including Rep. John Doolittle (R-Calif.), a harsh critic of BCRA and an opponent of most restrictions on campaign finance —cheered the FEC’s decision not to act.

“I appreciate today’s FEC decision, which applied a strict-constructionist approach to the law and rendered its decision in a fair and impartial manner,” Doolittle said. “The ruling did not attempt to make law, as the petitioners had sought, but instead followed the law as it was written by Congress — however abysmal that law may be.”

John Samples, a scholar at the libertarian Cato Institute, called the FEC decision consistent with the McCain-Feingold law.

“The McCain-Feingold law of 2002 prohibited soft money fundraising by federal officials. The law did not address the fundraising done by independent groups,” Samples asserted. “The FEC has chosen to enforce the letter of the law and the will of Congress by refusing to restrict the work of the 527 groups, most of whom are allied with Democratic presidential candidate John Kerry.”