Appraising BCRA: The Early Returns Are Troubling

Posted September 13, 2004 at 6:03pm

Norm Ornstein has expressed in these pages his “amazement” about the “misinformation” (and also “disinformation”) that plagues the current debate over campaign finance reform. He strenuously defends the Bipartisan Campaign Reform Act against the accusation that it deserves any responsibility for the proliferation and notorious conduct of 527s. Rejecting any such suggestion, he states, is “wrong, wrong and wrong again” — evidently for emphasis.

Now, Ornstein, an experienced hand at reform arguments, is right that some of what he hears is wrong. But not all of what he says on the subject is entirely right. And the larger point raised by his argument, one that he does not acknowledge, is that as the cycle wears on, very few people can, for the life of them, sort out what is right and what is wrong among the claims made about the new law. (This is not their fault: The law is complicated and confusing, and it appears to be a boon to soft money, especially 527 soft money, rather than its bane.)

Ornstein is correct in assailing President Bush for stating that the new law he signed was expected to do away with 527s and their ads. As an ardent Democrat, I am prepared to accept that the president, on this subject as well as on others, is misguided or disingenuous. It also is true that if he did not understand the law when he chose to support it — and if he has since found it confusing in content and frustrating in effect — he is not alone among public elected officials.

And while Ornstein is right to take the president to task for proposing the abolition of 527s, he is making matters seem simpler than what they are. The law did not completely abolish 527 ads, but it does prohibit some of those ads, run some of the time, if the 527 is incorporated or accepts corporate or union money — but not if it accepts unlimited individual monies. A little more presidential precision on these points would have been commendable, but it was hardly to be expected.

To the uninitiated, or the bored, this may seem an esoteric argument, but it might indicate why some — even the leader of the free world — might be confused about what the law does or does not “ban.”

Consider the fracas in Alaska over a station’s failure to observe what the Anchorage Daily News refers to as “the deadline … for airing soft-money advertising for federal candidates.” Professor Rick Hasen, a leading scholar in the field, commented critically on his Election Law Web log that “presumably, this group [whose ads were belatedly pulled] either is a corporation or takes corporate or union money. The article is sloppy in stating simply that a ‘deadline had passed for airing soft-money advertising for federal candidates.’” Perhaps sloppy: But as far as one can tell, those with less experience with or knowledge of election law — groups, candidates, station managers — still reasonably believe that they are dealing with a “deadline … for airing soft money advertising.”

These deadlines, Hasen correctly points out, apply only to certain corporate or union-paid ads. This is right, but the corporate or union ads subject to this deadline may be fewer in number than many believe. The FEC only last week ruled that the Ripon Society — a 501(c)(4) corporation actively promoting Republican candidates in this year’s election — could use corporate funds to pay for broadcast ads through Election Day that applaud “Republicans in Congress” for their response to terrorism.

This ruling, not resisted by the reform community, seems inconsistent with Ornstein’s claim that the new law does not permit organizations to pay for campaign ads “with labor union or corporate money … within 60 days of the election.” The Ripon Society is doing exactly that.

The rules and the exceptions to the rules, accompanied by conditions on the applications to the exceptions, continue to proliferate, along with the growing public and media bewilderment. These rules are different for 527s; and the rules further distinguish between incorporated and unincorporated 527s. 501(c)(4)s and 501(c)(3)s are not treated the same under the law; and not all political committees, some of which have soft-money accounts, work with the same rulebook. The differences do not end there, for there are more that turn on differences in the content and timing, as well as the funding, of specific advertisements.

Little is clear, except that an extraordinary sum of money, including a good bit of soft money, is being raised and spent. Because of all of the attention they have drawn, it is natural that many believe that 527s are the source of the problem — an unwelcome product of the new law. Because 527s are “new,” as is McCain-Feingold, it is assumed that last year’s reforms produced this year’s soft-money innovations.

Ornstein disagrees, arguing that the Swift Boat Veterans for Truth achieved its high profile with “brilliant” manipulation of the media. Sensitive to the suggestion that the new law hobbles parties while encouraging 527 soft money, Ornstein is adamant that “527s are not going to overwhelm the campaign messages of the parties or the candidates — not even close.”

His is a hearty optimism. Ornstein concedes that SBVT managed $20 million of publicity for 1/40th of the cost, since their original ad buy was $500,000. This weekend brought reports that SBVT had raised another $7 million — which, on Ornstein’s formula, suggests that between now and Election Day, SBVT might manage $280 million in publicity for its ads. The parties and candidates are not likely to match this kind of leverage with their own ads — not even close.

It is not altogether correct to say that McCain-Feingold has nothing to do with this state of affairs. The new law imposes strict funding limitations on parties and candidates; and yet, as Ornstein rightly says, “there was nothing in BCRA [McCain-Feingold] directly about 527s.” Some conclude that this approach — weakening parties and strengthening outside groups — was foreseeably mistaken.

Hence, the conclusion of this week’s cover story in Newsweek: “Pushed farther away from parties and into the hands of political operatives … [soft money] is now even less accountable than it was before.” Sen. John McCain (R-Ariz.) replied by blaming all of this, stridently and improbably, on two commissioners at the Federal Election Commission. This is what has become of — or is left of — the defense of the new law in this early stage of its evaluation.

Bob Bauer is a Democratic election lawyer at the firm Perkins Coie.