Monday, May 17, 2004

Republican-leaning private political groups are working overtime to raise money and catch up with Democratic-leaning groups that are way ahead in fund-raising efforts, now that the Federal Election Commission voted not to pursue new regulations for the groups this year.

“It has been difficult to raise money because donors were worried that the advertisements were not proper, and now it will definitely be easier,” said David Keating, executive director of Club for Growth.

The Club for Growth, a nonprofit organization, raises money to purchase radio and television advertisements to advocate smaller government, lower taxes and strong defense and to support candidates who agree with those views.

The Club for Growth and similar groups — known as 527s because section 527 of the Internal Revenue Code governs their nonprofit tax-filing status with the IRS — got a reprieve Thursday when the FEC decided not to regulate further the groups’ contributions, which are not subject to restrictions under federal campaign-finance guidelines. At present, all that is required of a 527 group is a clean, nonprofit tax filing to the IRS.

“I’m happy they decided not to decide, and I also don’t think there is any legal basis for them to regulate 527s any further,” Mr. Keating said.

He said the club was disturbed by Republicans’ attempts to shut down “free speech” by demanding that the FEC rein in the groups.

Some Republican lawmakers wanted to force 527s to register as political committees and abide by the 2002 Bipartisan Campaign Finance Reform Act (BCRA) and the Federal Elections Campaign Act, subjecting contributions to a cap of $5,000 annually from any donor.

The chief rival of the Club for Growth, another Republican-leaning group, the Mainstreet Individual Fund (MIF), supported the effort to curb the laissez-faire fund raising and spending, which both liberal and conservative groups have used to buy ads that beat up on candidates for federal office and directly influence elections.

“I know the Republican Party has tried to close the loophole, and [MIF] supported it being closed and would have no problem closing down [the Club for Growth],” MIF spokeswoman Sarah Chamberlain Resnick said.

Mainstreet formed as an opposition force against the staunchly conservative Club for Growth to tout fiscally conservative, but socially moderate Republican candidates. MIF says the Club could damage Republican chances of keeping the Senate by attacking centrist Republican candidates through its campaign ads.

But as Mr. Keating said, the Club for Growth will rev up its fund raising, so “I know [MIF is] going to increase their fund-raising efforts now. We don’t see that there is a choice,” Mrs. Resnick said.

The FEC voted 4-2 to postpone for 90 days a decision to create new regulations, saying that pressure from Congress would not compel the commission to move too fast to develop sweeping regulations that could negatively affect other groups unrelated to the 527s.

Republican donors who were not sure about the groups and viewed them as an affront to the ideals of the 2002 BCRA have been squeamish about giving money to 527s for ads and voter-registration drives aimed at helping their favored candidates.

However, Democratic operatives from the Clinton administration and the party took advantage of a loophole in the BCRA, in which 527s are not covered, and immediately began creating private political organizations such as Americans Coming Together and Media Fund Inc. to encourage big individual donations funneled to buy issue-based and direct-attack ads against President Bush.

Though the Bush campaign has outraised Sen. John Kerry of Massachusetts, the presumptive Democratic nominee for president, by $100 million and outspent him nearly 3-to-1, close to $50 million that liberal 527s have spent on anti-Bush ads nationwide have bolstered the Kerry campaign’s $86 million.

Republicans are all but compelled to move quickly to raise as much money as they can in the next six months to catch up with the Democrats, who have collected and spent millions already.

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