Sep 14, 2004 -- Press Release: McCain, Feingold to Support "527 Group" Lawsuit

Press Contact: Mark Glaze (202-271-0982)

Senators John McCain (R-AZ) and Russ Feingold (D-WI) will seek to participate in a lawsuit brought today by Representatives Marty Meehan (D-MA) and Christopher Shays (R-CT) that seeks to force the Federal Election Commission to promulgate new rules for so-called "527 political groups." The Campaign Legal Center supports the suit and will serve as counsel to the Senators in the case.

Federal law since 1974 has required groups that have a "primary purpose" of influencing federal elections, and which raise or spend more than $1,000 doing so, to register with the FEC as a "political committee" and adhere to the longstanding rules for such committees: they may spend only federally-regulated "hard money" to pursue their activities and must disclose their activities to the FEC.

J. Gerald Hebert, Director of Litigation for the Campaign Legal Center, noted that "the IRS laws define 527's as groups organized and operated primarily for the purpose of influencing or attempting to influence elections." He added: "Despite this clearly stated purpose of influencing elections, the FEC has repeatedly refused to designate 527's as political committees."

Hebert also said that "the FEC's failure to do so has meant these 527 groups, many of which informed the IRS when they were first formed that their goal was to influence federal elections in order to gain 527 tax-exempt status with the IRS, can hide from the general public the source of their money even though they were formed with the express purpose of influencing elections. As a result, these groups have flourished in the current election cycle, serving as conduits for tens of millions of dollars in soft money in the presidential contest."

The Campaign Legal Center, along with other reform groups, has filed a number of FEC complaints against both Republican- and Democratic-leaning 527 groups seeking to have their soft-money actions deemed illegal by the agency. The Commission has not yet acted on those complaints.

The suit filed in federal district court in Washington today argues that the FEC's repeated refusal to promulgate regulations for 527 groups is arbitrary and capricious, and therefore illegal under the Administrative Procedures Act. The suit seeks to have the court compel the agency to "commence proceedings to promulgate, on an expedited basis, appropriate regulations to define the term 'political committee.'"

Senators McCain and Feingold were the principal U.S. Senate sponsors of the Bipartisan Campaign Reform Act of 2002 ("BCRA"). They worked together for over seven years to secure passage of BCRA, to rid politics of the corrupting influence of soft money and enhance the public's confidence in the workings of its governing institutions.

The Senators will file a motion to participate in this suit as a friend of the Court because they perceive the FEC's failure to act in this area as denying the American people the full measure of protection from actual and apparent political corruption of the political process that unregulated 527's produce. They will seek to participate in the case to present their views on the importance of this case to the achievement of the purposes of BCRA. (The Senators are not parties to the suit themselves because Senate rules do not allow them to accept pro bono legal representation as parties in legal proceedings. Senators, however, are permitted to accept pro bono services for the filing of amicus briefs, and Senators McCain and Feingold have accordingly authorized the Campaign Legal Center to represent them as amici curiae in this case.)

The Campaign Legal Center also represents Senators McCain and Feingold as amici in another pending lawsuit, Shays v. FEC , a case that challenges the FEC's rules implementing the BCRA. In that case, Senators McCain and Feingold have argued along with the plaintiffs (Reps. Shays and Meehan) that the FEC's proposed regulations substantially undermined the intent of Congress by opening a number of loopholes in the new law.

Click here to view the Shays, Meehan complaint.