WASHINGTON – Election regulators imposed new limits Wednesday on non-party political groups that want to use large corporate and union donations to influence this fall's elections but declined for the time being to ban their use of big money.
The Federal Election Commission (search) voted 4-2 to place some restrictions on outside political groups that register with the commission to raise money - restrictions that will limit when and how they can use corporate and union money for election activities.
But the commission put off a decision on the larger issue of whether the nation's new campaign finance law (search), which bans such donations to federal candidates and political parties, should also outlaw big money donations to outside groups like tax-exempt partisan organizations.
The commission will begin to weigh that issue next month in a formal rule-making process that could stretch into the spring.
Ellen Weintraub, a Democratic commissioner, said Wednesday's ruling gives plenty of room for groups on both sides to collect and spend so-called soft money donations from companies, wealthy people and unions despite Congress' effort in 2002 to root out big money from politics.
"I think there's still a lot of room out there for people to operate," Weintraub said. "You can't stop the flow of money."
The new law banned the national political parties and federal candidates from soliciting or spending soft money (search) donations, but left open the question of whether the restrictions should apply to outside groups looking to influence elections.
The FEC's decision affects only outside political groups that collect small, legal donations known as hard money - allowed under the law - and also collect larger donations from companies and unions.
The commission ruled such groups can spend the limited hard-money donations only on activities such as ads that directly advocate the election and defeat of federal candidates. On activities affecting candidates up and down the ticket, the commission ruled the groups can spend a combination of hard- and soft-money donations.
The ruling, however, does not address groups that have cropped up that collect only soft money.
Earlier Wednesday, the FEC's Republican chairman scolded his own party for trying to get regulators to prohibit outside political groups from spending big corporate and union donations in this fall's presidential election.
Democrats are hoping to use the outside groups for fall election activities to make up some of the financial advantage Republicans have enjoyed under the campaign finance law that took effect after the 2002 election.
"It is not our place to measure the law in partisanship," Chairman Bradley Smith (search) said. "If Republicans think they can win by silencing their opponents, I think they are going to lose."
Americans for a Better Country (search), a Republican group that asked the FEC to decide Wednesday's issue, said the ruling is restrictive but allows it to proceed with its plans to counter Democratic group spending in the fall election.
"We said from the beginning we are going to raise as much money as we possibly can based on what the commission says we can do," said Frank Donatelli, an attorney for the group.
With both political parties jockeying for financial advantages under the new law, the FEC's actions over the next few months could determine how much special interest money flows into the campaign this fall.
Because Republicans raise millions of dollars more in the smaller donations permitted under the law, Democratic activists have formed tax-exempt groups to collect millions in soft money to finance get-out-the-vote drives and other election activities.
Hoping to stop them, the Republican National Committee (search) is pressing the FEC to restrict their use of soft money, siding with several campaign watchdog groups and a lead sponsor of the law, Sen. John McCain, R-Ariz.
Several Democratic lawmakers, including Senate Minority Leader Tom Daschle, argue the proposed rules go beyond the new law. Previously, Daschle credited his party with helping to pass campaign finance reform.