Jan 15, 2004 -- Press Release: 527s Violate Campaign Finance Law

The Campaign Legal Center today joined Democracy 21 and the Center for Responsive Politics in filing a complaint with the Federal Election Commission alleging that certain newly formed "527 organizations" created to spend soft money on the upcoming federal elections have violated campaign finance law.

According to media reports, these groups - Americans Coming Together, The Media Fund and The Leadership Forum - have been created expressly to spend large sums on partisan voter mobilization drives or "issue advocacy" designed to influence the coming federal elections, and have a major purpose of influencing federal elections. Federal election law requires organizations with such a major purpose, and that spend more than $1,000 to influence federal elections, to register as political committees with the FEC. Federal political committees may only accept "hard money" - limited contributions from individuals and other federal political committees.

These groups have set up purportedly "non-federal" accounts which will accept corporate and labor funds and large contributions from individuals - soft money - and use them to finance partisan voter drives or "issue advocacy" aimed at the coming federal elections. The complaint alleges that these accounts are, in fact, clearly federal political committees that must be registered with the FEC, and must operate within the normal "hard money" source and amount restrictions.

From the complaint:

In pursuing these schemes, these section 527 groups are attempting to replace the political parties as new conduits for injecting soft money into federal campaigns. As one published report has noted, several pro-Democratic section 527 groups have "stepped in this year to attempt to fill the vacuum created by the soft money ban. These groups are accepting large contributions from labor unions that the parties are prohibited from accepting. . . . in the process, [these groups] are taking over many of the functions traditionally associated with the parties, including voter registration, canvassing and turnout." (Quoting Tom Edsall, "Democratic 'Shadow' Groups Face Scrutiny," The Washington Post, Dec. 14, 2003.)

The complaint asks the FEC to impose appropriate sanctions and enjoin these groups from further illegal activity.

Comments made today by Glen Shor, FEC Program Director for the Campaign Legal Center, are below:

My name is Glen Shor, and I'm the FEC Program Director for the Campaign Legal Center. The Campaign Legal Center is filing this complaint with Democracy 21 and the Center for Responsive Politics in pursuit of a core mission of our organization - to promote proper enforcement of campaign finance law.

We are asking the FEC to enforce existing campaign finance law and conclude that the organizations named in this complaint are federal political committees. It is certainly clear that a political organization which spends more than $1,000 for the purpose of influencing federal elections, and has a major purpose of influencing federal elections, must register as a federal political committee and live by the applicable contribution limits.

The Supreme Court recently handed down its decision in McConnell v. FEC, in which it upheld virtually all of the Bipartisan Campaign Reform Act of 2002.

I think the broad message of the Court's opinion is that, in grappling with the facts of these cases, the FEC should not - and need not - interpret campaign finance laws in ways that defy campaign finance realities.

The FEC should be mindful that the Court expressly criticized it for doing so in the past - saying that the permission it granted for parties to spend soft money on voter drives and other campaign activity directly benefiting federal candidates was a subversion of the contribution limits long on the books.

The Court also put to rest the notion that "express advocacy" defined what spending could be constitutionally regulated.

And it signaled that federal campaign finance law rules could be applied to political organizations like these without narrowing constructions that render those rules useless.

This is an important test for the FEC, in the wake of a Supreme Court decision which found much to be desired in its previous enforcement of campaign finance law.

With full enforcement of the law here, we need not add this to the list of "hard lesson[s] of circumvention" pointedly referred to by the Court in the McConnell decision. We would instead mark a new and welcome day in the enforcement of federal campaign finance law.

Click here to view the FEC complaint.

Click here to view Exhibits A-J.

Click here to view Exhibits K-T.

Click here to view Exhibits U-EE.