Letter from Campaign Legal Center President Trevor Potter to Selected Members of Congress on H.R. 1316, "The 527 Fairness Act of 2005"

June, 2005

Dear Representative:

Earlier this month, the House Administration Committee reported out H.R. 1316, "The 527 Fairness Act of 2005," with amendments. This bill would re-open our campaign finance system to abuses and opportunities for corruption by allowing multi-million dollar contributions to our political parties - huge contributions that have been indisputably illegal since the 1974 Federal Election Campaign Act became law in reaction to the fundraising abuses of the Watergate era. As a former Chairman of the Federal Election Commission, I urge you to strongly oppose this dangerous and misguided legislation.

This bill seeks to eviscerate long-standing critical components of federal campaign finance law, such as aggregate contribution limits, which have been the law of the land for more than 30 years. A vote in favor of this Committee bill will take us backward to a world where the specter of large contributions that buy access and influence loomed over American politics. I urge you to make your vote a vote for clean government and the future - not the corruption of the past.

While the bill is titled "The 527 Fairness Act of 2005," it has almost nothing to do with 527 groups. Instead, it would allow federal officeholders to solicit millions of dollars from single individuals, opening the door to both the reality and perception that influence is being exchanged for large campaign contributions.

The bill would radically undermine a generation of reasonable campaign finance rules. Among its worst provisions:

• The bill would repeal the aggregate caps on contributions an individual may make to a political party or to federal candidates in an election cycle. Under current law, an individual may contribute $60,400 to party committees, and $40,000 to federal candidates. Under the proposed bill, federal officeholders and candidates could solicit more than $1 million for party committees and $2 million for federal candidates from an individual in a single cycle.

• Another provision of the bill would allow a federal officeholder or candidate who solicited a $1 million contribution to a political party from a single donor to control the expenditure of that money , in essence allowing that candidate or officeholder to use the funds for his or her own primary and general election campaigns. Under current law designed to curb the purchase of influence, an individual can only contribute $4,200 directly to a federal candidate's campaign in any election cycle.

• The bill would eliminate a key BCRA restriction which prevents the use of soft money for "sham" issue ads. Under the House Administration Committee legislation, labor unions, trade associations and advocacy groups would be permitted to use unlimited individual soft money contributions to pay for ads promoting or attacking candidates immediately before an election.

• The bill would relax restrictions designed to keep corporations and trade associations from pressuring rank-and-file workers to make contributions to multiple trade association PACs. Under current law, a corporation must approve any trade association's solicitation of contributions from its stockholders and executive personnel and their families, and can only approve such a solicitation by one trade association a year. Under this bill, an unlimited number of trade associations would be allowed to solicit the stockholders and personnel of a corporation that belongs to the trade association, without pre-approval by the corporation.

• The bill would exempt paid advertising on the Internet from the definition of "public communications." As a result, state parties (working with federal candidates) could spend unlimited amounts of soft money from corporations, labor unions and wealthy individuals to produce online ads and pay for advertising space on websites or to attack federal candidates through paid advertising on the Internet.

• The bill would increase the limits on special interest PAC contributions to candidates by 50 percent, from $10,000 to $15,000.

• The bill would repeal a BCRA provision that prevents federal officeholders and candidates from soliciting unlimited soft money contributions at state party fundraising events.

In sum, this bill would do serious damage to longstanding campaign finance principles, and would badly undermine public confidence in the integrity of our elections. I strongly urge you to oppose it.

Sincerely,

Trevor Potter