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House eyes two plans for ‘527s’

- The Washington Times - Sunday, July 3, 2005

The House likely will try to improve upon the last round of campaign-finance reforms when it returns from the July Fourth recess by combining two bills designed to curtail the influence that "527 groups" have over federal elections.

"They are two different approaches to the same issue, and I think what you will see, when the bills go to the floor, is people push to support one measure," said House Administration Committee Chairman Bob Ney, Ohio Republican. "I plan to vote for both bills."

Although Mr. Ney said he would not combine the bills in committee, House Majority Whip Roy Blunt said: "I think that some combination of the two bills is the best approach."

"One of the major problems with [the Bipartisan Campaign Reform Act] turned out to be the diminishing of political parties and the empowering of largely unaccountable outside groups and those bills approach those two problems," the Missouri Republican said.

The groups get their name from section 527 of the Internal Revenue Service code. The IRS defines a 527 organization as any private group that is organized and operated primarily to influence elections or the appointment of individuals to nonelective office, such as judgeships.

The House Administration Committee approved the two bills for floor debate last month. One, the 527 Reform Act, introduced by Reps. Christopher Shays, Connecticut Republican, and Martin T. Meehan, Massachusetts Democrat, would place private political groups under the same fundraising limits and reporting rules as political action committees.

The other, the 527 Fairness Act, introduced by Reps. Mike Pence, Indiana Republican, and Albert R. Wynn, Maryland Democrat, would not alter the way 527s operate, but instead would level the playing field for political parties by raising the amount of money they can receive from individuals in both the primary and general election seasons.

Democratic leaders oppose the Fairness Act. They say it will dismantle the campaign finance reforms of the 30 years since the Watergate scandal.

Rep. Juanita Millender-McDonald of California, ranking Democrat on the House Administration Committee, said Republicans are trying to solidify their power with the 527 reform act.

"Any organization that criticizes any member of Congress for supporting a policy like Social Security privatization would become a political committee," she said. "It insulates members of Congress a full year before the election cycle."

She said leadership is concerned about the rush to act as Congress has addressed 527s twice in the past five years.

Rep. Zoe Lofgren, California Democrat and House Administration Committee member, said the 527 reform bill likely would be found unconstitutional by the courts as violating First Amendment rights, the same concern of many Republicans who opposed the Bipartisan Campaign Reform Act.

Mrs. Lofgren said that the courts upheld the act only because they judged "that it was in the best interest to allow free speech while curtailing the corruptive effect money has with regards to federal candidates."

But, she said, there is no such perception that private citizens voluntarily forming a political umbrella group would be corrupted by large donations.

However, Rep. Vernon J. Ehlers, Michigan Republican, said that argument amounts to discrimination against the political parties.

"I fail to understand why 527s are constitutionally protected and the political parties are not," Mr. Ehlers said. "I think 527s are a curse to the political process with a lack of accountability shifting money back and forth [among themselves], which is usually a sign of some chicanery going on."