FEC sues GOP 527 group for violating finance laws

The Federal Election Commission yesterday filed its first court challenge against so-called “527 groups,” suing a powerhouse Republican advocacy group for violating campaign-finance laws from 2000 to 2004.

The FEC charges that the Club for Growth raised and spent at least $4 million more than the limit, and so the group should have had to register as a political committee and abide by donation and spending limits. The suit was filed in U.S. District Court in Washington.

“This litigation is an important test case on when 527 groups are required to register with the FEC and follow hard-dollar restrictions in federal law,” said Michael E. Toner, the commission’s vice chairman.

The 527 groups, named for the part of tax code that governs them, played a major role in the 2004 election, the first under the campaign finance rules that Congress passed in 2002. Those rules were intended to eliminate so-called “soft money,” the large donations that political parties and interest groups used to flood the airwaves with issue ads.

Instead, the parties have to rely on limited “hard dollar” contributions.

Swift Boat Veterans for Truth and Progress for America from the conservative side and MoveOn.org and the Media Fund from the liberal side led a host of 527s that advertised during the presidential race.

The groups say they are on sound legal footing.

Club for Growth President Patrick J. Toomey said yesterday’s suit was part of a “war on the First Amendment.”

He said the FEC’s suit was the result of a complaint by the Democratic Senatorial Campaign Committee that said the Club for Growth stepped over the line when it targeted Senate Minority Leader Tom Daschle, South Dakota Democrat.

“The commission allowed it to lie inactive for nearly a year and a half and then resurrected it as a platform to seek to take away our members’ rights and exact a huge civil penalty from the club,” Mr. Toomey said.

The Club for Growth’s stated purpose is to elect pro-economic growth, limited-government conservatives, often by advertising in Republican primaries.

In the complaint, the FEC said it tried to work out an agreement with the club, but the organization would not agree to a remedy. The FEC is considering action against other 527s.

President Bush’s campaign, key lawmakers who helped pass the 2002 changes and other political organizations sued the FEC last year for not enforcing its regulations on 527s. Those cases are pending in federal court.

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