- The Washington Times - Wednesday, April 5, 2006

The House yesterday narrowly approved new regulations for political 527 groups funded by multimillionaires — a change to campaign-finance law that Republicans argue will curb the influence the “super-wealthy” have on elections.

Campaign-finance reform measures passed in 2002 that banned parties and candidates from receiving unlimited donations “actually empowered these ideologically driven outside groups,” said Rep. Vernon J. Ehlers, Michigan Republican. “This bill will help restore some balance to our system.”

The House passed the measure by a 218-209 vote over the objections of most Democrats and 18 Republicans who felt it restricts the First Amendment rights of citizens.

The measure subjects the so-called 527 groups to the same federal election law governing political parties and candidates, including limits on contributions. Donors can give up to $5,000 per year toward efforts that directly affect a candidate.

Lawmakers said the groups, named for the section of the tax code under which they are regulated, played a significant role in the 2004 presidential election.

Rep. David Dreier, California Republican and chairman of the House Rules Committee, said the campaign-finance changes in 2002 left an “obvious and easy loophole to be exploited.”

One of the best-known conservative 527 groups in 2004 was the Swift Boat Veterans for Truth, which targeted the military service of the Democratic candidate, Sen. John Kerry of Massachusetts. On the liberal side were America Coming Together and the 527 arm of MoveOn.org, which ran ads critical of President Bush.

These groups were mostly funded by donations from millionaires — 25 persons gave $146 million in 2004.

Rep. Patrick T. McHenry, North Carolina Republican, said 527 groups are the equivalent of “money laundering … on a scale that would make Tony Soprano blush.”

Democrats said 527 groups are required to file quarterly reports with the Internal Revenue Service.

“They have to disclose where they got their money and how they spent it,” said Rep. Juanita Millender-McDonald, California Democrat. “Through 527s Americans are … holding public officials accountable for their actions. Their voices should not be silenced.”

Opponents noted the irony that House Republicans overwhelmingly opposed Democrat-led campaign-finance changes in 2002 as a violation of political speech.

The Democrats have a rare ally in conservative Grover Norquist, president of Americans United for Tax Reform, who called the 527 proposal unconstitutional. He said lawmakers instead should end all restrictions on campaign finance and make any donations public.

“Any American should be able to make a contribution, and good, right-wing billionaires ought to get their acts together and start writing checks,” Mr. Norquist said. “If you end this loophole, there will always be some other loophole.”

Rep. Jeff Flake agreed.

“It may be politically expedient in the short term to restrict what our political opponents can say or how much money they can raise, but Republicans run a far greater risk if we get out of the practice of expanding freedom and start limiting it,” the Arizona Republican said.

The Senate must approve the measure, which has the support of the White House.

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