Campaign Rules Likely Won't Stop Ads

Americans will see some changes in the volume and tenor of the political advertisements produced by so-called 527 groups (search) after a new 60-day ban on election ads kicks in Sept. 3 — but not much, campaign finance experts said.

Federal Election Commission (search) Chairman Bradley Smith said there are plenty of ways for 527s to continue paying for pro or con ads that do not violate the new campaign finance laws.

“People think this is going to suddenly end and that’s not going to happen,” Smith told, referring to the maelstrom of ads funded by outside groups raising millions of dollars on each side of the political aisle.

The ad wars reached a new high Thursday when President Bush filed a lawsuit against the FEC to force the bipartisan panel to restrict the money the 527s can raise and use to slam political opponents.

Bush’s suit — supported by campaign finance reformer Sen. John McCain, R-Ariz. — followed a week of controversy surrounding ads produced by the Swift Boat Veterans for Truth (search), a group of Vietnam War veterans that has released three ads questioning Democratic Sen. John Kerry’s war record and condemning his anti-war testimony to Congress when he returned home from Vietnam more than 30 years ago.

While Democrats called for Bush to condemn the ads, Republicans pointed out that Democrat-supporting groups are responsible for more than $200 million in soft money raised in 2004 by 527s. They also pointed to ads by groups such as (search), which have attacked Bush for the last several months.

Under the Bipartisan Campaign Reform Act of 2002 (search), all unregulated contributions, or “soft money,” were banned from political parties. The law also prohibits all television and radio ads paid for with funds contributed by labor unions, corporations and any money sent to an incorporated organization, which use the image or the name of a candidate, within 30 days before a primary or 60 days before the general election.

But outside, independent political organizations — called 527s after their Internal Revenue Service designation — are still able to raise the soft money and use it for electioneering, like get-out-the-vote efforts and issue awareness, as long as they do not directly contribute to, or coordinate with, candidates or political parties.

They can also get around the 60-day rule, which kicks in Sept. 3.

— Ads can be paid for with political action committee (PAC) money, as long as that money came from individuals or regulated “hard money” sources. Many 527s, like, have PACs. The ad ban does not affect Internet or print ads whatsoever.

— The 527s can reach out to wealthy individual donors to put up personal contributions for the ads. If the 527s are incorporated, like the Swift Boat Veterans for Truth, then the individuals can pay for and place the ads outside of the group, said Reid Cox, assistant general counsel for the Center for Individual Freedom, which was against the campaign finance law from the start.

Cox said most of the more savvy groups would have paid attention to the law and prepared for post Sept. 3 in order to continue running their ads exactly the way they want them.

“I think these organizations are very smart – no one came into this blind,” he said. “That’s the reason you have all of these 527s; they planned ahead.”

Smith predicted that 527s would reap the benefits of the soft money squeeze.

“[Sept. 3] is not going to knock these guys off the air,” Smith said. He added that there might be a slight reduction in the volume of ads on the air, but campaign finance reforms were never geared toward taking away the ability for individuals to contribute to the process.

“For me, personally, I think it's great that we live in a country that 260 guys can go out and influence a presidential campaign,” he said, pointing to the Swift Boat Veterans for Truth. “I don’t know why anyone would want to silence these guys.”

While the Bush and McCain offices did not condemn the Swift Boat Veterans’ ads outright, they believe that the spirit of the campaign finance reform law was to restrict any entities that actively advocate for the election or defeat of a federal candidate, including 527s.

“Sen. McCain enthusiastically applauds President Bush’s commitment to ensuring that 527s operate under the same funding rules that apply to federal political candidates,” McCain spokesman Marshall Whitman said in a statement Thursday.

But Common Cause, an advocacy group that had pushed hard for campaign finance reform, admits now that the law did not address the activities of 527s, which have been around for a long time but had operated mostly under the radar before the soft money ban.

“It’s always been about the source of money, and not about the kind of ads. What’s important to us is you won’t be able to have corporations or unions influencing these federal elections through these so-called issue ads,” said Celia Wexler, vice president for advocacy. “It would be great if you would only be raising hard money … but that would be only a side benefit.”

The Bush administration suit against the FEC follows a complaint already filed by the Bush campaign contending that and another 527, America Coming Together, is crossing the line into direct coordination with the Kerry campaign.

The FEC has contended that the law passed by Congress and signed by Bush in 2002 did not allow for the agency to further regulate 527 groups. Plus, FEC officials said, aside from small changes to the rules, it would likely not take up the issue until after the election.

Smith, who was unavailable for further comment on the Bush lawsuit Thursday, nonetheless said reformers, faced with the inadequacy of their own legislation, are blaming the FEC.

“Basically, you aren’t going to hear straight talk at this point from people who voted for the bill,” he said. “They’re going to look for a convenient scapegoat and the FEC is that scapegoat.”

As for the ad wars, told Thursday that it has been paying for its ads with hard money raised through its PAC, which has raised about $8 million as of the latest numbers from the Center for Responsive Politics.

According to spokesman Trevor Fitzgibbon, the anti-Bush 527 plans to run $3.2 million worth of ads during this week's Republican National Convention in battleground states.

And the Swift Boat Veterans, who have raised all of their soft money from individual donations, say they will continue their ad assault on Kerry as well, and remained undeterred by Bush’s lawsuit.

“We’re going to continue doing what we’re doing,” said spokesman Mike Russell, “because this group is made up of more than 250 veterans who feel it’s their obligation to tell the truth about John Kerry’s military service.”