- The Washington Times - Friday, June 16, 2000

Campaign-finance reform legislation is back in play in Congress. In an important procedural vote last week, the Senate voted 57-42 to attach to the defense authorization bill a campaign-finance amendment, which would require so-called Section 527 organizations to disclose annual expenditures and to make public the names of those who have contributed more than $200 to the organizations. Named after the Internal Revenue Service (IRS) provision under which they operate, Section 527 organizations are political groups formed to influence elections, adding a new dimension to political fund-raising and the financing of those issue-advocacy ads.

Under current law, 527 organizations may receive unlimited, non-tax-deductible contributions from individuals, labor unions and corporations. These 527 organizations may use these funds to finance get-out-the-vote drives, telephone banks, polling, direct mailings, issue ads and other political activity. In effect, 527 groups spend their money the same ways political parties, which are also classified by the IRS under the 527 provision, spend their soft-money contributions. However, unlike political parties, which are required to divulge the names of their soft-money donors, the amount of soft money they contribute and how the soft money is spent, 527s are not presently required to report their donors or their expenditures unless they expressly advocate the election or defeat of a federal candidate. To date, much of their money has been spent on issue-advocacy ads.

Liberal environmental organizations, such as the Sierra Club and the League of Conservation Voters, were the first to create 527 organizations several years ago. Nobody seemed to care. Indeed, the media never became outraged until associates of House Majority Whip Tom DeLay formed their own 527s and the Wyly brothers of Texas used a 527 organization to fund $2.5 million worth of TV ads attacking the environmental record of Sen. John McCain during the Republican primaries. The amendment the Senate passed last week was sponsored by Mr. McCain and Democratic Sens. Russell Feingold and Joseph Lieberman.

The American public has never suffered from an excessive amount of political speech during an election year. As such, 527 organizations can make valuable contributions. On the other hand, voters deserve to know who is paying for these ads. The Senate's amendment on 527s seems reasonable on the basis that more disclosure is always better than less.

In the House, Republicans seek to broaden the amendment that passed in the Senate. In addition to 527 organizations, a bill sponsored by Republican Rep. Mike Castle of Delaware will also require disclosure from other tax-exempt groups that seek to influence elections, including "social welfare" interests groups, which include the National Rifle Association and the National Abortion and Reproductive Rights Action League (classified as 501(c)4 organizations by the IRS) and labor unions (classified as 501(c)5 and 501(c)6 organizations by the IRS). Mr. Castle offers his bill in the spirit of full disclosure. His legislation would require any social-welfare group or labor union that spent at least $10,000 on election-related ads, including print ads and direct mail, in any year to divulge the names of each of their donors who contributed at least $1,000.

Mr. DeLay and Sen. Mitch McConnell, who has led filibusters in the Senate against campaign-"reform" efforts to ban soft money have both expressed support for Mr. Castle's broader approach. It will be interesting to see how Democrats respond to the requirement that many of their liberal allies disclose the sources of their funding.

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