FEC restricts use of ‘soft money’

The Federal Election Commission yesterday voted 4-2 to place restrictions on political advocacy groups with no expressed party affiliation that use “soft money” to influence elections.

At the same time, the six-member commission delayed a decision on a campaign-finance law that prohibits money from big businesses and unions from going to tax-exempt groups that are connected to political parties.

Large corporate and union donations to federal candidates and the party structures, popularly known as “soft money,” are outlawed under the 2002 campaign-finance reform law.

The commission ruled that groups without party connections can spend only donations from individuals — limited donations referred to as hard money — on campaigns targeting the defeat or election of candidates.

Republicans, who feared that newly formed tax-exempt groups would operate through loopholes in campaign-finance law, praised the commission’s stance.

“Today’s ruling effectively shuts down illicit 527 groups that operate in the shadows by using unregulated soft money to influence federal elections,” said Ed Gillespie, Republican National Committee Chairman.

The groups to which Mr. Gillespie was referring, called 527s for the name of the tax provision under which they were established, were formed in response to the 2002 law.

Commission Vice Chairman Ellen Weintraub said the commission’s ruling still provides room for groups to operate and encourages political activity.

“The area of get out the vote is one that we should not go out of our way to discourage,” said Miss Weintraub, a Democratic appointee, referring to an activity that has been embraced particularly by Democrats in recent years.

She said the flap over the financing of both affiliated and nonaffiliated political groups might encourage Congress to be more specific in campaign finance legislation.

The commission’s attorneys last month recommended that the FEC ban donations to tax-exempt groups devoted to affecting the outcomes of elections.

That recommendation was denounced by supporters of Democrats, particularly a coalition of 324 special-interest and advocacy groups.

The coalition, including the National Association for the Advancement of Colored People’s National Voter Fund, Planned Parenthood, the American Civil Liberties Union and the National Organization for Women Legal Defense and Education Fund, sent commissioners a letter saying that any restrictions “would entirely shut down many of the advocacy activities of our organizations.”

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