Oct 19, 2006 -- The Campaign Legal Center and Democracy 21 File New FEC Complaint Today Against 527 Groups for Spending Money to Influence 2006 Congressional Elections in Violation of Federal Campaign Finance Laws

The Campaign Legal Center and Democracy 21 today filed a new complaint with the Federal Election Commission (FEC) against The Lantern Project, a pro-Democratic 527 group, and Softer Voices, a pro-Republican 527 group, for spending soft money to influence the 2006 Pennsylvania Senate race in violation of the federal campaign finance laws.

Last week, Democracy 21 and the Campaign Legal Center filed a complaint with the FEC against two other 527 groups, the Economic Freedom Fund and Majority Action, for spending soft money to influence the 2006 congressional races in violation of the campaign finance laws.

According to the new FEC complaint, longstanding federal campaign finance laws and Supreme Court decisions, including the McConnell decision, make clear that 527 groups spending money to influence federal elections are required to register as federal political committees and comply with federal campaign finance laws, including limits on the contributions they receive.

Despite these legal requirements, 527 groups improperly spent large sums of soft money to influence the 2004 presidential elections and are now improperly spending millions of dollars of soft money to influence the 2006 congressional elections, the complaint states.

To date, the FEC has failed to take any action to prevent these improper activities.

According to the complaint, The Lantern Project and Softer Voices are organized under Section 527 of the Internal Revenue Code (IRC), and are each, by IRC definition, a ''political organization'' that is operated ''primarily'' for the purpose of influencing candidate elections.

The complaint states that The Lantern Project and Softer Voices each have as their major purpose influencing federal elections, have raised and spent substantial sums to influence federal elections, and therefore are required to register as federal political committees and comply with federal campaign finance laws, which they have not done.

''Our goals here are simple,'' said Democracy 21 President Fred Wertheimer. ''We want the FEC to enforce the campaign finance laws against 527 groups. We want to stop 527 groups from illegally spending soft money contributions from wealthy individuals, corporations and labor unions to influence federal elections. We want 527 groups to comply with the same campaign finance laws as the federal candidates whose races they are spending soft money to influence.''

''As a direct result of FEC inaction, 527 organizations have been able to spend the same kind of huge, politically-corrupting 'soft money' donations that were outlawed by the Bipartisan Campaign Reform Act,'' said J. Gerald Hebert, Executive Director of the Campaign Legal Center. ''The FEC's complete failure to regulate these organizations continues to undermine the campaign finance laws of our nation.''

According to the complaint, reports filed with the IRS show that The Lantern Project was established on January 10, 2005.

The complaint states, ''The URL for The Lantern Project's Web site is www.santorumexposed.com. According to the group's Web site, 'We believe that Rick Santorum has failed to use his position as a U.S. Senator to improve the lives of most Americans, and our mission here is simple: To shine a light on the facts about Rick Santorum's extreme positions, failed policies and hypocritical statements -- and let the facts speak for themselves.''' (Emphasis in original).

According to forms filed with the IRS and the FEC, The Lantern Project has raised at least $1,670,050 and has made disbursements of at least $1,459,310, during the period from July 1, 2005 to October 10, 2006.(There are no reports for The Lantern Project available on the IRS Web site for the period from January 1, 2005 to June 30, 2005.)

According to the complaint, forms filed with the IRS, show that ''the Lantern Project has received contributions of $250,000 from SEIU, a labor organization, $100,000 from Lewis Cullman, $100,000 from Bob Sillerman, $100,000 from Tim Gill, $100,000 from Peter Lewis, $50,000 from the law firm of Berger and Montague (as well as additional $25,000 contributions each from partners Daniel Berger and H. Laddie Montague Jr.), $35,000 from John Hunting, $25,000 from the Laborers Political League Education Fund, a labor organization, $50,000 (in two contributions) from Local 1776 United Food and Commercial Workers, a labor organization, and an additional $25,000 from United Food and Commercial Workers International Union.''

The complaint states, ''The Lantern Project's Web site is focused exclusively on Senator Santorum, featuring videos, articles and editorials attacking Santorum.''

According to the complaint, ''The Web site features a section titled 'Santorum on the Issues' which attacks Senator Santorum's position on issues such as social security, medical malpractice, minimum wage, education and stem cell research.''

The complaint states that according to information on the group's Web site, The Lantern Project has funded eight TV ads, one Internet ad and one radio ad, each of which refer to and attack Senator Santorum.

According to the complaint, Softer Voices was established on July 15, 2004.

According to forms filed with the IRS, Softer Voices has raised $975,000, during the period from July 1, 2005 to September 30, 2006. The total amount was raised from six donors whose contributions ranged from $25,000 to $400,000. (There are no reports for Softer Voices available on the IRS Web site for the period from January 1, 2005 to June 30, 2005.)

The complaint states, ''According to the IRS reports, Dr. John Templeton contributed $400,000 to Softer Voices. According to an October 2, 2006 article in the New York Sun, 'Dr. Templeton has given about $1 million in the past four years to the College Republican National Committee and has supported other conservative causes, including groups that pilloried Senator Kerry in the 2004 presidential campaign, Progress for America and Swift Boat Veterans for Truth.'''

According to the compliant, ''The New York Sun article notes, 'Under federal law, Mr. Templeton . . . cannot donate to American political campaigns. The Tennessee native renounced his American citizenship in 1968 and moved to the Bahamas in a bid to avoid taxes on the several billion dollars he reportedly made from his investment empire.'''

The complaint adds that according to IRS Reports, contributions to Softer Voices also include $250,000 from Foster Friess, $150,000 from Carl Lindner and $100,000 from Rob Arkley, $50,000 from Richard DeVos and $25,000 from Frank J. Hanna III.

According to reports filed with the IRS, Softer Voices has made disbursements of $918,241, during the period from July 1, 2005 to September 30, 2006, with all of the disbursements reported as being made during the month of September 2006.

According to a Philadelphia Inquirer article (October 3, 2006) Lisa Schiffren, a co-founder of Softer Voices, stated about the efforts of 527 groups, ''Of course, it is a way around campaign finance law.'' According to the Philadelphia Inquirer article, ''five wealthy conservatives'' donated ''as much as they legally could to Santorum's campaign--and then gave thousands more to Softer Voices . . ..,'' the complaint states.

The complaint notes that according to a New York Sun article, Softer Voices is trying to ''soften the image of Senator Santorum of Pennsylvania in the hope of boosting his standing with female voters and saving his Senate seat for the Republican Party.''

According to the October 2, 2006 article in The New York Sun:

Mr. Santorum's Democratic opponent, Robert Casey Jr., does not support the so-called welfare reform bill signed by President Clinton in 1996.

''We love this issue,'' a former speechwriter for Vice President Quayle and founder of Softer Voices, Lisa Schiffren, told The New York Sun. ''It's really important for conservatives to remember and for voters to remember that welfare reform was a conservative issue and that people like Rick Santorum made it happen and that people like Bill Clinton signed that bill kicking and screaming.'' (Emphasis added).

The article further stated:

Ms. Schiffren, who is best known for Mr. Quayle's 1992 speech accusing Hollywood of using a television series, 'Murphy Brown,' to glamorize single motherhood, said Mr. Santorum is suffering from women's perceptions that he is rigid and unforgiving. ''Women in general don't like to feel they're being mean by voting for a candidate who occasionally sounds too sure of himself and takes moral positions that can be off-putting,'' she said. (Emphasis added).

Softer Voices has funded three ads, to date, that promote or support Senator Santorum, according to the complaint.

In 2004, Democracy 21, the Campaign Legal Center and the Center for Responsive Politics filed a number of similar complaints with the FEC against six 527 groups spending soft money to influence the presidential election. More than two years later, the FEC still has not taken any public action on the pending complaints regarding five of the 527 groups. The complaint against the sixth 527 group was dismissed by the FEC this year on the ground that the group ended up not running any ads.

As in previous FEC complaints they have filed against 527 groups, Democracy 21 and the Campaign Legal Center noted in the complaint the role the FEC has played in subverting the nation's campaign finance laws, including its role in establishing the soft money system.

According to the FEC complaint:

It is critically important that the Commission not repeat this history here. The Commission must ensure that it does not once again subvert and invite ''widespread circumvention'' of the law by licensing the spending of massive amounts of soft money to influence federal elections, this time through section 527 groups whose major purpose is to influence federal elections.

In September 2004, Representatives Christopher Shays (R-CT) and Marty Meehan (D-MA) filed a lawsuit challenging the FEC for its failure to issue regulations to require 527 groups to comply with the campaign finance laws. The FEC responded to the lawsuit by stating it had decided to enforce the laws against 527 groups only through case-by-case adjudication rather than by issuing regulations on 527 groups.

On March 29, 2006, Judge Emmett Sullivan of the federal district court in Washington, D.C. ruled that the FEC had ''failed to present a reasoned explanation'' for its decision to terminate its rulemaking on 527 groups without issuing any new regulation on such groups. Judge Sullivan found that ''judging from FEC's track record in the 2004 election, case-by-case adjudication appears to have been a total failure.''

Judge Sullivan remanded the case back to the FEC and ordered the agency either to articulate a more persuasive basis for enforcing the laws against 527 groups only through case-by-case adjudication, or to promulgate new regulations for 527 groups.

After the FEC failed to respond to the court order for more than six months, Representatives Shays and Meehan filed a motion with Judge Sullivan on September 13, 2006 and asked the court to set a deadline for the FEC to comply with the court's order. Judge Sullivan has scheduled a hearing on the motion for November 2, 2006.

To view the complaint, click here.

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