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Lawmakers Urge FEC to Be Tougher on 527s

After watching an election influenced by independently financed attacks like the Swift Boat Veterans (search) and Michael Moore's "Fahrenheit 9/11," backers of the new campaign finance law already are plotting further assaults on big political money.

Rather than go back to Congress and reopen a debate settled by the 2002 law, supporters first are setting their sites on getting the courts to force the Federal Election Commission (search) to take tougher positions against free-spending independent groups known as 527s.

Sen. John McCain (search), R-Ariz., co-sponsor of the law that banned federal candidates and their parties from raising big donations known as soft money, says the law's debut in the 2004 election was successful, but more work is needed.

"It was designed to eliminate the corrupting influence of corporations, unions and individuals, and it did that," McCain said. "But the obvious loophole is the 527s. But the 527s are not a failure of the law. The 527s are a failure of the dysfunctional Federal Election Commission."

Another issue regulators must grapple with is what to do when a filmmaker like Moore or a media chain like Sinclair Broadcasting seek to influence the election with work that, under a media exemption, has traditionally fallen outside government regulation.

Political operatives say the election of 2004 occurred exactly as lawmakers intended: Big money was rooted out of the Republican and Democratic parties and shifted to new, outside groups like the 527s who carried on the tradition of high-dollar attacks.

"Nobody should have been surprised, and quite frankly, I don't think anybody was," said Harold Ickes, an architect of Bill Clinton's 1996 re-election campaign who helped mold the Democrats' strategy of using outside groups in 2004.

With political parties limited to $25,000 in donation a year per person, six-figure check writers naturally gravitated to the new outside groups to extend their influence in the election, he said.

"Why wouldn't money go there?" Ickes asked. "They can form their own committee, or they can help raise money and contribute to a 527-type committee."

The election provided many examples of new forms of political persuasion:

—Bankrolled at first by a few big GOP donors, Swift Boat Veterans for Truth aired ads in late summer accusing John Kerry of dishonesty about his Vietnam service record, making it a campaign issue for weeks.

—George Soros, a billionaire financier, poured $27 million into efforts to unseat President Bush through various groups, some of which aired ads critical of Bush's record.

—Moore's anti-Bush documentary and ads promoting it last summer opened a new debate over how far an exemption freeing the media from restrictions on corporate-financed ads mentioning candidates close to elections should go.

—A documentary about Kerry's military service, planned for airing on 62 Sinclair television stations, came under fire from the Democratic Party and a substantial number of senators who contended the production amounted to unpaid advertising for Bush. What aired was an abbreviated version that contained balancing material.

The FEC is inclined to consider filmmakers like Moore part of the media. It is considering new rules to make clear that the current exemption to political spending limits for media companies applies to studio-financed ads promoting their work, even if they should focus on a presidential candidate during a campaign.

There is far less agreement at the FEC and in Congress about what, if anything, to do about groups like the Swift Boat Veterans and the Soros-backed efforts.

America Coming Together, which spent millions from Soros and other wealthy Democrats to get anti-Bush voters to the polls in presidential battleground states, will stay up and running, Ickes said.

The Media Fund, Ickes' anti-Bush ad effort also partly financed by Soros, is no longer operating, Ickes said. He said he might create a similar fund for 2006 Senate races.

McCain is looking first to the courts. He and other proponents of the new law say the soft-money groups clearly are banned from federal elections by a 1974 campaign law.

They contend the FEC, comprising three Republican and three Democratic commissioners, does not enforce those rules and either should be replaced by Congress with a tougher agency or ordered by a judge to crack down on 527s. A majority of commissioners, however, say the law isn't so clear, and it's up to Congress to act.

The law's House sponsors and Bush's campaign have filed lawsuits asking a judge to order the FEC to limit the groups' fund raising and spending. The cases, filed in September in U.S. District Court in Washington, could take years to resolve.

A leading House member, the Administration Committee's chairman, Robert Ney, said he is open to considering legislation to place some limits on donations to the groups. The bill's effect, Ney said, would be "most likely that no one individual can put in tens of millions of dollars."

But Ney, R-Ohio, said he isn't sure he would go as far as a proposal by McCain and others that would turn most of the 527s into political committees that could raise only money from individuals, with donations capped at $5,000 a person per year.