- The Washington Times - Saturday, September 28, 2002

The Federal Election Commission has freed tax-exempt charitable, educational and religious groups from political-ad restrictions imposed by the new campaign-finance law.
FEC lawyers advised against the move, calling the exemption too broad.
The commission voted 4-2 Thursday to exempt the organizations from provisions that ban interest group TV and radio ads the month before a primary and two months before a general election if they name a federal candidate, are financed with unlimited corporate or union contributions and are targeted at the candidate's district.
Sponsors of the law, including Sen. John McCain, Arizona Republican, and Rep. Christopher Shays, Connecticut Republican, contend the tax-exempt groups have used phony issue ads to evade the prohibition on the use of union or corporate money to influence federal elections.
Issue ads may mention federal candidates, but cannot directly call for their election or defeat.
The exemption was sought by the Sierra Club Foundation and the Alliance for Justice, an association of about 60 liberal consumer, civil rights, environmental and other groups. They argued the law would make it impossible for them to air effective lobbying ads.
"It just avoids all sorts of pointless overregulation," John Pomeranz, the Alliance's nonprofit advocacy director, said after learning of the FEC's decision.
Already, charitable organizations are absolutely forbidden under tax law from doing anything that might smack of partisan electoral politics.
Commissioner Michael Toner, a Republican, said organizations that misuse the exemption to engage in campaign activity will lose their tax-exempt status.
FEC lawyers advised against granting the exemption.
"Such a blanket exemption is too broad for the limited exemption authority" the law provides the commission, they wrote.
Larry Noble, head of the nonpartisan Center for Responsive Politics and a former FEC lawyer, said the commission has the power to draw some exemptions, but Thursday's decision went too far.
"It clearly is pushing the limits, exempting a broad class of organizations regardless of what they say," Mr. Noble said. He said the decision likely will give such groups an incentive "to push the line and perhaps be more political" because they now can do something many organizations cannot under the new law.
The law's sponsors have said they intend to challenge the FEC in court and in Congress over its earlier interpretation of the law's ban on unlimited contributions by corporations, labor unions and others to national political parties. Such donations are known as "soft money."
The soft-money rules drawing the criticism were approved by the same 4-2 vote as the political-ad exemption, with Democratic Commissioner Karl Sandstrom joining the three Republicans on the panel.
On Thursday, the commission approved the exemption for religious, educational and charitable organizations after refusing to grant a similar one for ads by special-interest groups that urge voters to contact their congressman or senator for or against a political issue. That measure failed on a party-line vote, with the three Democrats backing it and three Republicans opposing it.
The law's prohibition does not apply to pre-election ads by campaigns, political parties and political action committees. Those ads are paid for by contributions that the new law limits and requires to be disclosed.

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