Are New Campaign Finance Regulations an Attack on Free Speech?

Article excerpt

Recently there has been an uproar from liberal nonprofit organizations over possible new Federal Election Committee (FEC) rules that would regulate some organizations' efforts to air anti-Bush ads during this election year. The regulations are aimed at independent political committees--section 527 groups.

Republicans see this as a chance to shut off one source of Democratic campaign funds and thereby improve Republican chances for victory in November--and Democrats are aggressively challenging the proposed rules for the same reason.

Those in the campaign finance reform community see this as a rare opportunity to gain the cooperation of the party in power to bring about greater scrutiny and control of election money flow. If unchecked, the existing loophole would continue to give the wealthy a louder voice during the election cycle, and render our democratic process one where the average American is disregarded in favor of wealthy special interests.

Paradoxically, many progressive organizations which traditionally support small "d" democracy and campaign finance reform are asking the FEC to scrap or postpone the proposed rules. Humanist allies including People for the American Way, the Alliance for Justice, and the Sierra Club have all issued statements against the proposed rules. Potentially misleading alerts have circulated from these and other organizations that suggest the FEC is trying to ban all nonprofits from criticizing Bush and members of Congress.

Both sides of this debate agree that the primary target of these new rules is actually 527 organizations like the liberal and the conservative Club for Growth, not 501(c)3s like the American Humanist Association and Americans United for Separation of Church and State.

People for the American Way accurately defines a 527 as an

   organization that is allowed
   to collect unlimited contributions,
   without disclosing
   donors' names, to run "issue
   ad" campaigns during elections....
   527 groups do not
   have to disclose their identity
   or reveal their activities to
   the IRS or the FEC. Given the
   fact that contributions are
   unlimited, the spending by
   the 527 is far larger than that
   of the PAC [Political Action
   Committee], though specific
   finances are hard to trace.

Contributions to 527s, as opposed to 501(c)3s, are not tax deductible on account of their partisan nature.

The extent of the rules is where the debate starts. These 527s and their allies are saying that the rules will stifle free speech. Alliance for Justice legal council Tim Mooney said in a telephone interview that it "could even ban nonpartisan voter registration activities, and nonprofit research reports that happen to be critical of a candidate." He also suggested that if the FEC tightens the language to specifically exempt 501(c)3s (as they are expected to do), there will be another problem. By defining what 527s do as influencing elections it paints issue ads and other potentially nonpartisan activities as partisan, thereby laying the groundwork for similar rules that specifically limit 501(c)3s down the road.

But Larry Noble, executive director of the Center for Responsive Politics, said in a telephone interview that such fears are unwarranted, and that "there's no proof of a slippery slope being created" The FEC's interest in specifically curbing 527s in order to protect the interests of the average voter is not intended to be a burden on 501(c)3s.

A close read of the FEC rules supports Nobles assertions. The bulk of the FEC rules apply only to "political committees," which they define as groups "the major purpose of which is the nomination or election of a candidate." (See the FEC document yourself at political_comm_status/04-5290.pdf) Since 501(c)3 status involves an absolute prohibition on such activities, this automatically excludes organizations with that classification from the rule--assuming they are operating within existing law. …