Court: FEC Does Not Need to Regulate 527s

Posted August 30, 2007 at 3:48pm

A district court judge agreed on Thursday that the Federal Election Commission can continue to police outside 527s on a case-by-case basis, pushing the issue back to Members of Congress, who already face a heaping post-recess legislative plate.

The U.S. District Court for the District of Columbia on Wednesday ruled in favor of the FEC, dismissing a case brought by Rep. Christopher Shays (R-Conn.) and former Rep. Marty Meehan (D-Mass.). The suit attempted to compel the agency to issue rules for outside political groups such as the conservative Swift Vets and POWs for Truth and the liberal America Coming Together.

Those groups, along with a handful of others, infused millions of dollars in unregulated political money during the 2004 presidential election, which some lawmakers and campaign finance reformers argued circumvented the Bipartisan Campaign Reform Act of 2002.

Shays and Meehan filed their suit in September 2004. During the past year, the FEC has handed down significant penalties to Swift Vets and POWs for Truth and other 527s. On Wednesday, the agency announced it had reached a $775,000 settlement deal with ACT for violating campaign finance laws, adding to a series of hefty penalties the agency began handing down in December 2006.

Campaign finance reformers quickly criticized the court’s decision and the agency’s long delays in adjudicating their complaints, which were filed more than three years ago. With the court agreeing that outside 527s should not be required to register with the agency, reformers also used the court’s decision Wednesday to demand that lawmakers rewrite the books on political committees.

“The ball is now in Congress’ court to pass meaningful 527 reform legislation,” read a statement by the Campaign Legal Center. “The FEC has proven too politically freighted to be given unbridled discretion to formulate its own regulations. We stand ready to work with both parties to pass legislation that will reform this broken agency and regulate 527 groups.”