Mar 2, 2007 -- $750,000 Fine Against 527 Group Is Good News, But a 527 Regulation is Still Badly Needed: Statement of Paul S. Ryan, Campaign Legal Center FEC Program Director

The Federal Election Commission (FEC) announced this week that Progress For America Voter Fund (PFA-VF) has agreed to pay the agency a $750,000 fine—the third largest in the FEC's history—as part of a settlement to resolve a complaint filed against the group in 2004 by the Campaign Legal Center, together with Democracy 21 and the Center for Responsive Politics.

The Campaign Legal Center is pleased that the FEC agreed with our position that PFA-VF violated federal campaign finance laws by raising and spending more than $30 million to influence the 2004 presidential election, but without registering as a federal "political committee" and complying with the contribution limits and disclosure requirements that apply to political committees.

But the FEC's action comes two and a half years after our complaint was filed, and more than two years after PFA-VF spent its money to influence the 2004 election. The Campaign Legal Center, together with Democracy 21, has complaints against several other 527 organizations still pending before the FEC, including complaints against two of the highest spending 527s in 2004 (ACT and the Media Fund), and against four 527 groups active in 2006. This illustrates the flaw in the FEC's decision to enforce the law on a case-by-case basis rather than by issuing a clear rule to govern activity by 527 political organizations. The case-by-case approach amounts to too little, too late.

The FEC's case-by-case approach also fails to provide the regulated community with the necessary guidance it needs to comply with the law. As Progress For America Voter Fund's attorney Benjamin L. Ginsburg stated in a press release (http://pfavoterfund.com): "Despite Congressional pressure to impose some set of rules or provide guidance for so called '527' groups, the FEC still refuses to do so."

Further, the length of time it takes the FEC to take enforcement actions against 527 groups on a case by case basis may lead 527 groups to continue to make illegal expenditures—knowing that their punishment will come long after the election, several years down the road, in the form of a fine that is a small fraction of the amount spent illegally to influence a federal election. Such a fine is likely to be seen as little more than a cost of doing business.

For this reason, the Campaign Legal Center continues to urge the FEC to adopt a regulation making clear that 527 groups spending money to influence federal elections must register as federal "political committees." And in light of the FEC's unwillingness to adopt such a regulation, the Legal Center urges Congress to enact the 527 Reform Act of 2007 (S.463, H.R. 420), introduced on January 31, 2007 in the Senate by Senators Russell Feingold (D-WI) and John McCain (R-AZ), and in the House of Representatives by Congressmen Martin Meehan (D-MA) and Christopher Shays (R-CT).

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